Steps to refinance a home.
Refinancing a home involves several steps, which can vary slightly depending on the lender and your specific situation. However, the general process typically includes the following steps:
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Refinancing costs typically range from 2% to 5% of the loan amount. These may include application fees, appraisal fees, closing costs, title insurance, and other charges.
The main benefits include reducing your monthly mortgage payments, lowering your interest rate, shortening or extending the loan term, or accessing home equity for home improvements, debt consolidation, or other financial needs.
Homeowners refinance to secure a lower interest rate, reduce monthly payments, change the loan type (e.g., from an adjustable-rate mortgage to a fixed-rate mortgage), or tap into home equity for other expenses.
Home refinancing involves replacing your current mortgage with a new one, usually with different terms, such as a lower interest rate or a change in the loan’s duration.
Refinancing requires a combination of financial documentation, including proof of income, credit score, and home value. Be prepared for an appraisal and to show the lender that your current mortgage is in good standing. If you meet the lender’s requirements, refinancing can result in better terms and lower monthly payments.
Here’s a list of the key requirements for refinancing:
- Proof of Income
- Credit Score
- Current Mortgage Information
- Home Appraisal
- Property Information
- Debt-to-Income (DTI) Ratio
- Closing Costs
- Employment Verification
- Refinance Purpose
- Additional Documentation (if applicable)