When you refinance a mortgage loan, you can replace your old mortgage loan with a new one that fits your needs. If your current loan isn’t working out for you, a refinance might provide you with a way to manage your mortgage more effectively without selling your home. Our guide to refinances and the best places to refinance a mortgage in Oregon will make the process of getting a new loan easier.
Best Refinance Lenders in Oregon
The best mortgage company for you will vary depending on the type of refinance you need. If you don’t already have a lender in mind for your refinance, consider a few of our favorite lenders.
Avg. Days to Close Loan
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Avg. Days to Close Loan
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Avg. Days to Close Loan
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Current Oregon Refinance Rates
When you refinance your mortgage loan, your lender will offer you a new interest rate that’s in line with current market rates in your area. Market interest rates can change over time and while declining rates can mean saving money, locking into a higher rate can mean spending thousands more for the same loan.
Let’s take a look at an example. Imagine that you want to refinance a $200,000 loan to a 30-year term. You have 2 lender options: Lender A and Lender B. Both lenders offer you the same principal balance and a 30-year term. However, Lender A offers you an annual percentage rate (APR) of 4%, while Lender B offers you a rate of 4.5% APR.
If you take the loan from Lender A, you’ll pay a total of $143,738.99 in interest. If you choose Lender B, you’ll pay a whopping $164,813.40 by the time you own your home. That’s over $22,000 more for the exact same loan.
Below, you can see a sample of what you might expect to pay for your loan in Oregon today. Track how rates are changing in your state over time and lock in when rates are low to maximize your savings.
|7/1 ARM (adjustable rate)||3.875%||3.457%|
|5/1 ARM (adjustable rate)||2.875%||3.061%|
The prospect of refinancing a mortgage loan can seem intimidating. However, most homeowners find the refinance process to be much simpler than the process they went through when they got their original loan. No matter where you decide to refinance in Oregon, you’ll go through these basic steps.
Choose Your Refinance Type
Before you can apply for a refinance, you need to know what type of refinance you need and what you want to accomplish by refinancing. Some goals you might have when you decide to refinance include:
- Lowering your monthly payment
- Lowering what you’re paying in interest each month
- Working with a different mortgage company
- Changing your loan type
- Taking cash out of your home equity with a cash-out refinance
Decide why you want to refinance and clearly define your goals. If you aren’t sure how much equity you have or what your current interest rate is, contact your current lender and request a new mortgage statement.
Once you know what you want to get out of your refinance, it’s time to apply for a new loan. Though many buyers choose to refinance with the company that gave them their original loan, you might also choose to work with a new lender.
Submit an application for a rate, term, type or cash-out refinance with your lender of choice. The specific process you’ll go through when applying will vary by lender. Most local lenders and online mortgage companies now allow you to apply for a refinance completely online — you might even be able to apply from a phone or tablet. You’ll usually get a refinance decision shortly after you apply.
Appraisal and Underwriting
Once you’re approved for a refinance, your lender will begin underwriting your loan. During underwriting, your lender will verify your financial information and assets. They’ll also run a credit check on you and read your credit report. Most of the time, underwriting takes place 100% behind the scenes and closes without incident.
Your lender will also schedule a new appraisal for you as part of the refinance process. During your appraisal, a home value expert will visit your property and assign an official estimate of value to your home — just like when you took out your original mortgage. You’re free to attend your appraisal to guide your appraiser to upgrades and renovations you’ve made since you moved in.
Close on Your New Loan
After your lender finishes underwriting your loan, they’ll send you a document called a Closing Disclosure with the final terms of your new loan. Review your Closing Disclosure and acknowledge it with your lender so the lender can schedule your closing meeting.
At your closing meeting, you’ll pay whatever you owe in closing costs and sign off on your new loan. Be sure to bring the following items to closing:
- Your driver’s license, passport or another official government-issued photo ID
- Your Closing Disclosure
- Proof of payment for your closing costs or a cashier’s check to cover the outstanding amount you owe
If your lender owes you money (like after a cash-out refinance) you’ll typically receive it 3 to 5 days after you close on your new loan.
When Should You Refinance in Oregon?
Refinancing can solve many of the most common mortgage woes seen by homeowners. If you’re having trouble managing your loan, a refinance might be in order. Let’s take a look at a few of the most common loan issues a refinance can solve.
- A monthly payment you can no longer afford: If you can’t afford your monthly mortgage payment, you might want to refinance to a longer term. Increasing your loan term gives you more time to pay off what you owe, which means that less money is due each month.
- An interest rate that’s no longer a bargain: Have interest rates in your area gone down since you got your loan? If local rates have fallen, you might want to consider refinancing your mortgage loan. When you refinance, you take on a new loan with an interest rate that’s similar to current market rates, which can mean saving money on both a monthly basis and over the life of your loan.
- Outside debt that’s piling on interest: The average credit card has an interest rate of between 15% and 27%, while the average mortgage loan has an interest rate that hovers around 4% annually. If you have high-interest debt that’s rapidly building, thanks to an expensive interest rate, you can save money over time by consolidating what you owe with a cash-out refinance.
When Should You Not Refinance?
Even the best refinance mortgage companies can’t fix every loan issue. If any of the following apply to you, you might not want to refinance at this time.
- You’re planning on selling your home soon. The longer you have your mortgage loan, the more benefits you’ll see from refinancing. If you plan on putting your home on the market in the next few years, you might be paying more in closing costs than you save with your refinance.
- You don’t have sufficient home equity. Most lenders won’t allow you to cash out more than 80% to 90% of your total home equity. If your loan is new, you might not have enough equity to reach your goals or to justify a cash-out refinance.
- Interest rates are higher now. Though falling interest rates can be beneficial, higher interest rates can actually cause you to lose money after a refinance. As we’ve demonstrated, even a small change in your interest rate can mean paying much more to your lenders, so if you do refinance, make sure you’re locking into a lower rate.
Bad Credit Refinance
If you have bad credit, you might have a harder time getting a refinance. Lenders need to know that you’re going to repay your mortgage when they give you a new loan. If you have a low credit score, you’re statistically more likely to default on your loan. However, there are a few strategies you can use to refinance when you have bad credit.
- VA IRRRL: If you have a VA loan, consider refinancing with a VA interest rate reduction refinance loan (VA IRRRL). The VA IRRRL is a streamlined, simplified refinance that allows you to refinance an existing VA loan without a credit check or appraisal. To qualify, you must have made your last 6 loan payments on time and you must only refinance your rate or term (no cash-out refinances).
- FHA streamline: Similar to the VA IRRRL, the FHA streamline refinance is ideal for FHA loan holders who have bad credit because it doesn’t require a credit check or appraisal. To qualify, you must have made your last 12 mortgage payments on time and you must be refinancing your rate or term.
- Apply with a non-occupying co-client. A non-occupying co-client is someone who agrees to sign onto your refinance but who doesn’t live in your home. Applying for a refinance with a non-occupying co-client allows you to “piggyback” off a friend or family member’s credit, increasing your chances of approval. However, if you fail to repay your loan, your lender can pursue your co-client for your remaining balance.
Refinancing in the Beaver State
If you’re still stressed out by the prospect of getting your refinance, you may want to begin by researching all of your loan options. From Quicken Loans’ comprehensive Rocket Mortgage platform to the Federal Reserve’s official guide to refinancing, there are an endless number of free research sites and tools to make the process easier. Like taking out a new mortgage loan, refinancing can be a major commitment. Don’t jump in until you know that you’ve got all the facts.