Refinance Loans in California

WHEN IS THE BEST TIME TO REFINANCE A MORTGAGE IN CALIFORNIA?

The answer is simple: when it makes sense for you. It is ideal for most people to refinance a loan when rates suddenly drop by 0.5–1% from what you currently have, although these numbers can be negotiable. For many families, we have successfully completed refinancing projects meant for erasing a loan's private mortgage insurance, accessing equity, or adjusting a loan's terms from an adjustable to a fixed loan program.

The rate-drop situation. Consider you have a $500,000 loan at 7% and rates are about 6%. That's about $300-$400 difference a month, and $4,000 a year. With closing costs estimated at $8,000, you'll see a split in two years, and everything afterwards is pure profit. Want us to calculate the difference for you?

Elimination of the PMI. You might be paying a mortgage insurance cost of $150-$400 a month in the event you didn't make a 20% down payment when you bought your house. With the value of your house appreciating by 15–40% in most areas of California, you may be able to eliminate your PMI entirely with a refinance. This can save you an extra $2,000-$5,000 a year.

Accessing your equity. Cash-out refinancing is useful when you need access to cash and don't want to pay high rates of interest on debt. Credit cards 18%–25%, personal loans 10%–15%, HELOC 8%–11%. How about a 6%–7% cash-out refi? Bay Area residents who purchased a home 3–5 years ago can expect to have equity available worth $200,000+ for home improvement projects and other big-ticket items. Read more about your equity options.

Before your ARM is adjusted. For a 5/1, 7/1, or 10/1 adjustable-rate loan, you want to watch closely when your first fixed period is up. Rates can increase 2-3% with an adjustment. A fixed loan will shield you from potential increases in rates and will lock your payments.

HOW LONG DOES IT TAKE TO REFINANCE A MORTGAGE IN CALIFORNIA?

Expect 30 to 45 days for most refinancing transactions. For simple transactions such as FHA Streamline and VA IRRRL, expect 3 to 4 weeks for closing. For cash out refinancing, expect 5 to 6 weeks.

The appraisal is always the hang-up. It takes 10-14 days just to schedule an appraiser in a busy marketplace such as the Bay Area. For FHA Streamline Loans and VA IRRRL Loans, the appraisal is waived, shaving a week or two off the closing process.

Want to expedite? Have your paperwork ready—pay stubs, W-2's, taxes, bank statements, present mortgage statement. Answer the lenders' requests within a day. Avoid drastic financial changes during the process—a new job, new loan. If you're qualified for a streamline loan, apply for one—it's a shortcut.

Get your free refinance quote and lock in your rate.