Photo by Richard Hurd
Capitol Bank: 5 Things You Should Know Before Refinancing Your Mortgage
An Interview with Amy Gile-Enge, Senior VP of Mortgage Lending at Capitol Bank
By Natalie Gregerson, Director of Marketing/Officer at Capitol Bank
Beginning in 2020, interest rates fell to historically low levels and millions of Americans rushed to refinance their homes. With mortgage rates expected to remain low in 2021, we want to make sure homeowners have an understanding of the refinance process. We asked Amy Gile-Enge, Senior VP of Mortgage Lending at Capitol Bank, for the 5 things someone should consider before refinancing their mortgage.
1. Amy, how would someone know if they should refinance?
“Refinancing is all about saving money in the long run. It really depends on the remaining balance of your mortgage, the interest rate and the time remaining on the loan. If you are nearing the final years of your mortgage, it may cost you more in closing costs than what you will save with a lower interest rate. On larger mortgage balances or for borrowers with several years of mortgage payments remaining, a slightly lower interest rate will most likely save you enough money in the long-term to make the refinance process worth it.”
2. What kinds of mortgage loans are available when refinancing?
“Aside from low interest rates, a change in situations and circumstances often causes people to refinance, and we have different mortgage loan products to fit varying needs. Commonly, people will refinance from Adjustable Rate Mortgages to Fixed Rate Mortgages. Instead of having an interest rate that can fluctuate, this type of refinance allows for a stable interest rate throughout the life of the loan. Cash Out Refinances are available for certain individuals with a large amount of equity in their home. Capitol Bank has a list of all our mortgage products on our website and we help borrowers determine their best option based on what is available to them.”
3. How much does it cost to refinance?
“Refinancing will involve closing costs. These can include but aren’t limited to: prepaid interest, appraisal fees, recording fees, title fees and administrative costs. Contact one of our mortgage lenders to discuss what types of costs you may incur with refinancing.”
4. When refinancing, how would someone choose the term of the mortgage loan?
“It really depends on your income and what monthly payment you’re comfortable with. A relatively short-term loan will mean you pay less in interest over the life of the loan than with a longer-term mortgage, but it also means your monthly payment will be larger. If you’re more comfortable with a lower monthly payment, a longer-term loan will mean you’ll pay more in interest over the life of the loan, but the lower payment will be more manageable on a monthly basis. In addition, if you find you are able to make extra payments, you’ll save money in interest by paying off your mortgage early.”
5. Amy, you’ve been in mortgage lending for over 25 years. Can you explain, in a nutshell, how the refinance process works for those that may not be familiar?
“First, you would want to contact Capitol Bank, or fill out the mortgage application on our website. At this point, one of our mortgage lenders would contact you to let you know what additional documents are needed, such as tax statements, bank statements and pay stubs. This is part of the underwriting process, something all borrowers must go through to obtain a loan. Once approved, your mortgage lender would contact you to let you know what interest rate, term and mortgage loan type you qualify for. An appraisal may be ordered to determine the current value of your home. Finally, your mortgage lender will schedule the loan closing with you to go through paperwork and collect your signatures. If it seems stressful, don’t worry! Our mortgage lenders have a combined 45 years of experience and will walk you through the process. With currently low interest rates and the large amount of borrowers applying to refinance, you can expect the entire process to take anywhere from 30 to 90 days.”
Contacting Capitol Bank’s Mortgage Team
For questions on current interest rates, refinancing or general mortgage information, please CLICK HERE to connect with our mortgage team. Amy, Howard or Cori will be in touch with you!
All mortgage loans are subject to underwriting approval. Capitol Bank is Member FDIC and an Equal Housing Lender.
Amy Gile-Enge NMLS #586017
Howard Cagle NMLS #593729
Cori Femrite NMLS #594085