Stage 1: Determine if Refinancing Makes Sense
Before contacting any lenders, run the calculator. You need: current loan balance, current rate, remaining term, estimated new rate (from published averages or initial quotes), and estimated closing costs (use 2–3% of balance as a starting estimate). If the break-even is under 36 months and you’re staying longer: proceed.
Stage 2: Prepare Your Credit and Documents
- Pull free credit reports at AnnualCreditReport.com (all three bureaus)
- Pay credit card balances below 30% utilization (preferably under 10%)
- Gather: 2 years tax returns, W-2s, 2 months pay stubs, 3 months bank statements
- Get your current mortgage statement and note exact balance and rate
- Pull homeowners insurance declarations page (new lender needs it)
Stage 3: Shop for the Best Rate
Contact 3–5 lenders. Include: your current bank, an online lender (Rocket, Better, LoanDepot), and a local credit union. Submit applications within a 14-day window (one credit inquiry for all). Request a Loan Estimate (LE) from each — legally required within 3 business days.
Stage 4: Compare and Choose
Sample Loan Estimate comparison across 3 lenders (illustrative $400K refinance)
| Comparison Point | Lender A | Lender B | Lender C |
|---|---|---|---|
| Interest rate | 6.35% | 6.40% | 6.25% |
| APR | 6.58% | 6.55% | 6.65% |
| Origination fee | $1,800 | $1,200 | $2,800 |
| Total closing costs | $8,200 | $7,400 | $10,100 |
| Monthly payment | $2,248 | $2,261 | $2,228 |
Stage 5: Lock and Close
After selecting a lender, lock your rate immediately (don’t float if you’re satisfied with the rate). The process from lock to closing typically takes 30–60 days. You’ll receive an appraisal order, a clear-to-close notice, and a Closing Disclosure 3 business days before closing.
Start With the Calculator
Stage 1 is here. Calculate if refinancing makes sense before calling a single lender.