Refinance in Vermont

Refinancing your mortgage doesn’t need to be confusing. If your mortgage isn’t working for you, use our guide to refinances in Vermont to make the process of getting a new loan easier and less stressful.   

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Best Refinance Lenders in Vermont 

Working with one of the best refinance mortgage companies will make getting a new loan easier. But which refinance lender is right for you? If you don’t already know where you want to refinance your loan, consider one of our top lenders in Vermont.

Current Vermont Refinance Rates

Before you decide to refinance your mortgage, take some time to track how interest rates are changing in your area. When you refinance, your lender will offer you a loan that’s in line with current market rates. If rates have fallen since you got your loan, this can mean you save thousands of dollars by the time you own your home. However, if rates are higher now, you might want to wait to refinance.

Here’s a table of current average market refinance rates in Vermont. We update this data regularly to ensure that you have access to the most recent data available.     

Refinance Process

You may decide to refinance your mortgage because their financial situation has changed since they first got their home. You might have a higher credit score now, your income may have changed or you might have taken steps to build extra equity in your property.

Before you apply for a refinance, decide how you’d like to change your loan to meet your new goals. For example, you might want to lengthen your loan term if you can no longer afford to make your payments or you might want to refinance to a lower interest rate if your credit score has improved. You might also want to take a cash-out refinance, which is a refinance that allows you to access a portion of your home’s equity in cash.

Once you decide which type of refinance you need, you’ll apply for a new loan. The best place to refinance a mortgage will vary depending on your needs as a homeowner. If you aren’t satisfied with your current lender, you might want to explore other lenders in your area. To find the best mortgage company, you might want to consider asking a few representatives the following questions:

• What types of loans do you offer?
• What are your current rates and fees?
• What is your application process? 
• Do I need to visit a branch to complete my application?
• What type of customer service do you offer?

After you find a lender you want to work with, submit an application for preapproval. The specific documents and application you’ll complete will depend on your lender’s individual specifications. For example, if you work with an online lending platform like Quicken Loans’ Rocket Mortgage, you’ll be able to complete your application entirely online. If you choose a more local option, you might need to apply in person.

Your lender will begin underwriting your new loan as soon as you receive a loan decision. In most circumstances, your lender will also require that you get a new appraisal before you can close on your new loan. Unlike when you got your original mortgage loan, you’re now free to attend your appraisal and guide your appraiser through your home in order to ensure the highest possible estimate.

There are a few steps you can take before your appraisal to increase your home value:

• Make any last-minute repairs. You shouldn’t begin a major renovation project before a home appraisal. However, if you have any last-minute repairs, be sure to make them before your appraisal date.
• Create a list of upgrades and renovations. If you’ve made permanent upgrades to your property since moving in, create a list of them for your appraiser.
• Tidy up. The cleanliness of your home won’t impact its value. However, it can be more difficult for an appraiser to assess the true condition of your property when your home is a mess.

After your appraisal and underwriting close, your lender will send you a document called a Closing Disclosure. Like when you got your original loan, your Closing Disclosure tells you the final details of your new loan and what you must pay in closing costs. Acknowledge your Closing Disclosure with your lender and attend a closing meeting. Once you complete your closing meeting, your refinance is officially closed. 

When Should You Refinance in Vermont?

Refinancing your mortgage loan can offer you a number of benefits. Let’s take a look at some of the reasons why you might want to refinance your loan.

• You can’t afford your monthly payment. If you’re having trouble making your mortgage payment each month, you may want to refinance to a longer term. Refinancing to a longer term lowers what you owe each month without requiring you to sell your home.
• You want to take advantage of lower interest rates. Are average mortgage interest rates in your area reaching new lows? If they are, you can refinance to a new loan to take advantage of lower rates by locking into a new loan. Even a small decrease in your interest rate can mean major savings.
• You need to consolidate outside debt. The average mortgage loan has an interest rate around 4%. When you compare this rate to the average credit card’s interest rate (between 15% and 27%) it’s clear that mortgages are one of the most affordable ways to borrow money. If you have credit card debt, auto loan debt, student loan debt or another type of debt that’s rapidly accruing interest, you can often save money by consolidating it with a cash-out refinance. 

When Should You Not Refinance?

Refinancing isn’t right in every circumstance. If any of the following describe your situation, you might lose more by refinancing than you would by keeping your original loan.

• You want to shorten your loan term. You can lengthen or shorten your loan term with a refinance. However, if your goal is to pay your loan off early, you might not need to pay for a refinance to do so. Contact your lender to inquire about scheduling an extra monthly mortgage payment applied directly to your principal balance. Very few loans now include early repayment penalties — which means that you’ll likely be able to make extra payments on your loan without refinancing.
• You want to move out of your home in the next few years. The more years you have on your loan, the longer you’ll enjoy the benefits of refinancing. If you have plans to sell your home in the next few years, you might end up paying more in closing costs than you save.
• You can’t afford closing costs. Though closing costs are almost always more affordable on refinances than they are on new mortgage loans, refinance closing costs can still equal thousands of dollars. If you can’t afford your closing costs now, it’s usually a good idea to hold off on refinancing. 

Bad Credit Refinance

Like when you take out a new mortgage loan, your credit score plays a major role in your ability to get a refinance. If you have a lower credit score, you’ll pay higher rates and you’ll be limited in your loan options. If you have a very low score, you might have trouble finding a lender willing to give you a new loan.

While refinancing with a low credit score is difficult, it’s not impossible. Let’s take a look at a few options you can use to refinance with lower credit.

• A VA interest rate reduction refinance loan (VA IRRRL) can allow you to refinance your loan’s rate or term without a new appraisal or credit check. To qualify, you must already have a VA loan, you must have made your last 6 payments on time and you must have already had your original loan for 270 days.
• An FHA streamline refinance can allow you to refinance without a new appraisal or credit check, like a VA IRRRL. To qualify for a streamline refinance, you must have made your last 12 payments on time, you must already have an FHA loan and you must take away some kind of tangible benefit after refinancing.
• Apply with a non-occupying co-client. A non-occupying co-client is someone who agrees to be financially responsible for your loan but who doesn’t live on your property. If you know someone who has great credit, you may want to consider asking them to apply as a co-client on your loan refinance. 

Your Options for Refinancing

From local refinancing companies to online mortgage lenders offering multiple types of loans, you have plenty of options when it comes to taking a new loan in Vermont. With so many lenders available to you, it’s beneficial to take your time comparing multiple loan options and speaking with more than 1 lending company. Knowing all of your options and what you must have to qualify for each will help you find the most effective refinancing solution for your needs.