Steps in Ohio Home Refinancing

Steps in Ohio Home Refinancing

Ohio Refinancing is the process of paying off one- loan with the proceeds from a new loan secured by the same property. Generally the Ohio closing costs are financed into the new Ohio loan.

Step 1. Considering the benefit. The prospective borrower works with the Ohio loan officer to evaluate the benefit of refinancing a new Ohio loan on the prospective borrower’s home. The prospective borrower could be interested in Ohio home refinancing in order to lower monthly Ohio mortgage payments, take some cash out of the equity, or just change loan types (e.g., from an adjustable-rate mortgage to a fixed-rate loan). A refinance transaction must offer an identifiable benefit to the borrower, such as a lower interest rate, lower payment, debt consolidation, or cash for home improvement.

Step 2. Application stage. The Ohio home loan officer will take the loan application, obtain authorization to order a credit report, provide the required predisclosures, order a credit report, and ask for the necessary documents to begin the processing of the Ohio home loan.

Step 3. Gathering documentation. The loan officer works with the processor to gather all necessary documentation. An appraisal will be ordered. An escrow or settlement company will be chosen, and a title report will be ordered.

Key Note: FHA, VA, and conforming Ohio home loans offer streamline refinances, which may not require any income verification or appraisal.

Step 4. Processing stage. The processor, if working for an Ohio mortgage broker, will submit the loan package to the lender for approval or will run the loan through DU or LP for automated underwriting. If the Ohio home loan is originated with a lender, the processor submits the loan to the in-house underwriter for a decision on the loan.

Step 5. Underwriting stage. The underwriter, working for the lender, will review the loan file and provide a decision on the loan. The underwriter will issue a conditional approval or denial.

Step 6. Review by processor. The processor reviews the decision and notifies the Ohio loan officer of the decision. If additional documentation is requested, then the processor will provide this information to the underwriter.

Step 7. Final approval stage. If all conditions were satisfactorily met, the lender will issue a final approval.

Step 8. Loan doc stage. The Ohio home loan processor coordinates the deliverance of the loan documents between the lender and the escrow or settlement company.

Step 9. Signing stage. The Ohio loan processor coordinates the date and time of the signing of the loan documents with the escrow or settlement company and the borrower. In some cases the escrow or settlement company provides a traveling notary public service to bring the loan documents to the borrower for signature. Once signed, the documents are returned to the lender.

Step 10. Review by lender. The lender receives the loan documents and reviews them to ensure that all necessary documents have been received and signed properly. The lender will then prepare to release funds on the fourth day after the right of rescission.

Key Note: On an “owner-occupied” refinance, the funds are not released until a three-day right-of-rescission period is over. This period gives applicants three days to change their minds and is required by the Truth in Lending Act. The right of rescission is applicable to refinances and Ohio home equity loans (second mortgages), but it does not apply when purchasing or refinancing an investment property. In addition, the three-day right of rescission is not required in some states, known as wet-funding states.

Step 11. Funding stage. The lender wires the funds to the settlement company. The settlement company receives the funds and disburses them to the appropriate parties. The settlement company will instruct the title company to record the mortgage or deed of trust with the local public county recorder. (In California, recording must occur prior to the releasing of funds.) The loan is funded and recorded, and all parties are notified.

Step 12. Servicing stage. The lender will set up the loan for servicing, set up an account, and begin the collection of mortgage payments. If the lender does not service its own loans, the loan is released to a servicing company. The borrower makes payments to the servicing company.

Learn more about Ohio mortgages and Ohio refinance mortgages by clicking here http://www.ohio-mortgage-services.com