Home Refinancing FAQs
General Refinancing Questions
What is home refinancing?
When you refinance, you’re replacing your current mortgage with a new one that typically will offer different rates and terms that are more beneficial to you.
What are the benefits of refinancing a home?
Refinancing your home can offer a number of advantages:
- Paying off your home sooner by reducing your mortgage term.
- Building equity faster with a shorter mortgage term and different monthly payments.
- Lowering your monthly payments by changing your mortgage rate and term.
Refinancing can allow you to take cash out for home improvements, college, debt consolidation and more.
What is a cash-out refinance?
With a cash-out refinance, you use your home equity to replace your existing home loan with a new one for more than you owe on your house. You then receive the difference as a cash payout.
When does it make sense to refinance a home?
- You decide not to move instead of buying a new home and want to save money over time.
- You have an adjustable-rate mortgage that could cost more due to rising interest rates.
- Your home’s value has increased, allowing you to tap into higher home equity by refinancing.
- You’ve been in your home a short time and want to build more equity via refinancing.
Are there any prepayment penalties?
No, at UW Credit Union there are no prepayment penalties for paying extra toward your loan principal or paying off your loan early.
Does my credit get pulled when I apply?
Yes, all mortgage and refinance applications require a credit report. If your credit is frozen, we ask that you unfreeze your credit before submitting your application for faster processing.
Is the UW Credit Union mortgage team local?
Yes! UW Credit Union employees live and work nearby, with most of our mortgage and refinance team based in Madison and Milwaukee.
Do I have to be a member of UW Credit Union to apply?
You do not have to be a UWCU member to apply for a loan with us. We ask you to join and become a member before your loan is finalized – all it takes to join is opening a savings account with $5!
How do I apply for a home loan or refinance?
The best way to apply for a new home loan, refinance or preapproval is to submit an application online. There is no cost or obligation to apply. After you apply, a mortgage loan officer will be in touch to discuss your application and next steps.
What happens if I want to change my type of loan after I apply?
No problem! You can change your loan type at any time prior to closing. Keep in mind that different loan programs may have different requirements, so it’s best to change your loan type as early in the process as possible to avoid delays. Be sure to stay in contact with your mortgage team as the process continues.
How will I receive updates about my loan?
The process to complete a home loan generally takes at least a few weeks as your application is processed, underwriting occurs, paperwork is signed and your loan closing is scheduled. Throughout the process, you will receive updates from your mortgage team, as well as automatic email notifications, with updates and timing. And remember that you may also contact your loan officer at any time with questions or concerns.
When can I lock my rate?
It's understandable that you want to lock in a low rate as quickly as possible. However, rates are not locked at the time you submit your application. First, it’s important for us to review your information and discuss the loan with you to make sure we proceed with the best option for your needs. After our initial review and conversation, you will have the opportunity to lock your rate.
What happens to my old home loan when I refinance?
UW Credit Union will fund your new loan and pay off your old loan. This happens simultaneously, and your old loan will show that it has been paid off at the same time that your new loan is funded. If you had escrow funds in your old loan, those will be refunded to you by the financial institution that serviced your old loan.
Rapid Refinance Questions
Is the fee really just $149?
Yes, the basic fee is $149. On rare occasions, an appraisal fee may also occur (around $400), but that is usually not needed.
Is the rate fixed or adjustable?
All rapid refinance loans have fixed rates.
Will UW Credit Union keep my loan or will it be sold to someone else?
UW Credit Union services all our home loans and refinances, and rapid refinances are not sold.
Can I escrow my property taxes and homeowners insurance?
No, unfortunately escrow accounts are not available for rapid refinances. If your current mortgage is escrowed and you choose rapid refinance, your existing escrow funds will be refunded to you or used to reduce your loan amount.
Is an appraisal required?
No, a full appraisal of your property is typically not required. If you have concerns about the valuation that we obtain, you can request a full appraisal.
What kinds of properties are eligible for rapid refinance?
Rapid refinance is available for owner-occupied properties only, including single-family homes, condos, double-wide manufactured homes, and 2- to 4-unit properties in which you reside. Ineligible properties include vacation homes, second homes, single-wide manufactured homes, timeshares and construction loans.
What information do I need to provide when applying for a rapid refinance?
When you apply, your mortgage loan officer will work with you to obtain all required documentation. This typically includes your most recent W-2s and paystubs. If you are self-employed, copies of your most recent federal tax returns are generally acceptable in lieu of W-2s and paystubs. If you are retired, we ask you to provide copies of your SSI or pension award letters, along with account statements showing deposit activity.