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How To Refinance Your Home Mortgage - Loan Processing and Underwriting ( Step 8 )
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Step 8: Loan processing

The loan processing stage gives the mortgage company time to inspect and record all of the documents you’ve submitted with your loan application.

Get a home appraisal

Once your refinance is processing, many lenders will set up an appraisal of your home to verify it is worth enough to qualify for a new home loan. However, Beeston notes that Fannie Mae and Freddie Mac have streamlined the process so much that you don’t always need an appraisal.

Their new technology provides automated comparisons that can gauge the risk of offering you a new loan and help you qualify for an “appraisal waiver,” she says. In that case, you won’t have to endure or pay for an appraisal.

If you do need an appraisal, however, your mortgage lender will set it up for you. Once the appraisal is completed, both you and your lender will receive a copy that includes an estimate of your home’s value.

Underwriting

During the next step of the process, mortgage company employees known as underwriters go through all the paperwork involved in the refinance to make sure it makes sense and matches up in their system. “The underwriter checks all the paperwork that supports the loan,” says Beeston. “Their job is to make sure everything entered into the system is accurate.” However, some lenders also automated underwriting engines to speed up the process, relying on people only when follow-up or additional information is needed.

During this part of the process, you may receive questions or requests for additional information as well.
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