Refinancing Tips for a Smooth Closing

Refinancing your mortgage is a complex procedure with many moving parts, and it's important to stay informed and get the details correct. You, the consumer, have the law on your side; but you have to know your rights, whether you're closing a second mortgage, home equity loan, or refinance mortgage.

Meet RESPA

The Real Estate Settlement Procedures Act of 1974 (RESPA) gave homebuyers a number of powerful new rights to make sure that you have all the information you need, complete and correct, before making such a huge financial decision. You may be familiar with the HUD form, a document that shows all the fees and charges involved in your home purchase. RESPA gave you the right to ask for your HUD statement the day before closing the loan.

That's a very good thing. Get your details a day early and go over the small print with a fine-tooth comb. If you have an accountant, attorney, or real estate agent available, ask for support on the hairy issues. Compare the HUD document with the Good Faith Estimate you received when you originally applied for the mortgage refinance. And make sure to ask your closing agent about any significant differences between the two statements.

The Main Event

It's a good idea to schedule your closing early in the day, to provide some cushion in case there are any problems. Remember to bring any documents that your lender has requested, such as paid property tax receipts, copies of your existing mortgage, or a money order for the closing costs. Keep your papers organized. You'll want to minimize the time spent looking for the right document at the closing table, and you won't forget anything if your materials have been verified against a checklist of required papers.

By crossing your 'T's and dotting your 'I's in advance, you'll be sure that your new loan is all that you expected, and there won't be any last-minute headaches. The most complicated of refinancing programs can, with the right preparation, be as simple as ABC.