Refinancing a Home
Wondering if refinancing is right for you?
Whether you're looking to lower your mortgage payments or get a better rate, we'll help you find the perfect loan—and be with you every step of the way.
When should I refinance?
Refinancing takes a little time and effort—but it can really pay off. So when's the best time to take advantage of it? Check out these questions to help you decide.
Have you paid your mortgage long enough to consider refinancing?
Generally, you'll need to have more than 20% equity in your home to refinance. Check with your mortgage lender to see if you're there yet.
Have property values been rising in your area?
A higher property value can give you even more options as you refinance. For example, your home appraisal could put you over the 20% threshold sooner than you might think.
How much can you lower your interest rate?
See if you can lower your rate by at least 1%. Many lenders suggest that this is a good benchmark for improving your financial situation by refinancing.
Are you going to stay in your home a few more years?
If you're going to stay in your home for several years, then you'll probably have time to recover your closing costs with the overall savings from refinancing. But if you plan to move in a couple of years, you might not have enough time to ensure refinancing pays off.
Do you have a good credit score today?
If you have good credit, you'll benefit by getting a lower interest rate and long-term savings. If you don't have great credit, then it's well worth it to wait. When you improve your score you can get a lower interest rate, which could save you a significant amount of money over the long run.
The bottom line
You should only refinance when the time is right. If you do it well, you can lower your interest rate, your monthly payment, and the amount that you pay for your home overall.
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Mortgage loan options
Whether you're a first-time homebuyer or a long-time homeowner, BB&T has mortgage loan options to meet your needs. We'll partner with you to ensure your buying or refinancing experience is a success.
Will I benefit from refinancing?
Refinancing can really give your budget a lift—it can give you a better deal on your house, or provide you with new options to pursue your financial goals.
To make sure refinancing is the right choice for you, thoroughly consider the benefits versus the costs.
The benefits of refinancing
Most people are interested in refinancing their mortgages to get a:
- Lower interest rate
- Lower monthly payment
- Better loan and term
You may enjoy:
- Significant savings over the life of your loan
- Purchasing power with cash for home renovations, education costs and more with cash-out refinancing
- Simpler and more affordable finances with debt consolidation
The cost of refinancing
When you refinance, you'll have to pay for:
- Home appraisal. Prices vary, but appraisals are typically paid up front by the home owner.
- Costs to close. You may have the choice to include this amount in your refinancing so that you don't have large out-of-pocket expenses.
Once you have estimated closing costs, figure out how long you plan to stay in your home. Then you can determine how much the lower monthly payments will save you during that time, so you'll be able to tell if it's a good decision to refinance.
And remember to consult a tax advisor when you refinance. Depending on your situation, your deductions may be different for the upcoming tax year. If you choose cash-out refinancing, keep in mind that the IRS has specific guidelines (opens in a new tab) about the tax deductibility of mortgage interest.
The bottom line
For many people, the benefits of refinancing outweigh the costs. You can save money if you choose to refinance at an opportune time, and if you decide to stay in your home long enough to reap the benefits of refinancing. Just be sure to cover all the bases as you make your decision.
Your mortgage checklist
You can streamline the process of applying for a BB&T mortgage by collecting, in advance, all the information you'll need.
To start your BB&T mortgage application process, be sure to have the following information:
- Full name
- Social Security number
- Property address for the property you are purchasing or refinancing
- Estimated value of the property
- Mortgage loan amount being requested
Documents you need
There will be a number of documents that you'll need to upload during the application process. For each applicant, you will need:
- Paycheck stubs for the past 30 days
- W-2 forms for the past 2 years
- Completed tax returns for the past 2 years
- Signed copy of IRS Form 4506-T
- Bank and investment statements for current assets
- A list of income sources
- Records of monthly debt payments
- The estimated value of your home, if applicable
- Rental property income, if applicable
- Gift letter with a canceled check and corresponding bank statement, if applicable
- Profit-and-loss statement (for self-employed applicants)
After you have submitted your mortgage loan application, your Mortgage Loan Professional will contact you to discuss the loan terms. You will receive a loan estimate and other disclosures for review. Once you have provided your intent to proceed, your Mortgage Loan Professional will request documentation to validate your income, assets and liabilities.
Ready to get started?
Personalizing the mortgage experience
Learn how one client bought his first home and then later refinanced—with the same mortgage loan officer.
Explore your choices for refinancing today.
Make an informed choice for your future