Guide to Refinance, Mortgage,
& Home Equity Loans in
Smiths, Alabama (AL)

Smiths, Alabama has an official name of Smiths Station, Alabama . According to local legend, in the 1960s a postmaster got tired of writing “Smiths Station” and took it upon himself to shorten the name. Smiths Station is the second newest city in the State of Alabama and in the 2000 U.S. Census had a recorded population of just below 22,000 residents. Smiths Station is considered a part of the Auburn, Alabama metropolitan area, but is really more closely linked to the Columbus, Georgia-Alabama metropolitan statistical area.

If you are thinking of purchasing a home in Smiths, Alabama or you are thinking about a refinance option for your current mortgage, then now is the time to consider your options. A home equity loan can also provide you with benefits.

Mortgage Loans

Your first step will be to find a lender and start the mortgage pre-approval process. Initiating a pre-approval process will help the rest of your mortgage loan process flow much more smoothly. You will need to gather pertinent paperwork for your lender to see. The needed paperwork will include:

W-2 tax forms from the past two years (1099 forms if you are self-employed)
Recent pay stubs
Recent bank statements
Recent cancelled mortgage or rent checks
Documentation proving a steady work history

Your lender will also run a credit check on your financial history to evaluate how well you have paid your bills in the past. This credit check will result in your credit score. Your credit score is a valuable piece of information, as it will help your lender determine your creditworthiness. If your credit score is 700 or higher, then that will also help your chances of receiving a lower interest rate on your loan.

The next step will be to decide on a mortgage loan type. Two of the most basic and common types of mortgage loans are the fixed rate mortgage and the adjustable rate mortgage (ARM).

A fixed rate mortgage lets you keep the interest rate you receive at the time of your loan for your complete loan term. Your interest rate will never change, regardless of economic fluctuations. Your monthly mortgage payments will remain the same as well. This is a loan that will remain consistent and dependable for the life of the loan. The typical loan term for a fixed rate mortgage is 15 or 30 years.

An adjustable rate mortgage starts your loan off with a lower interest rate than normal for the first few years. This can be beneficial for first time homebuyers, as it will help you ease into the routine of making monthly mortgage payments. After the first few years, your interest rate has the ability to adjust according to economic and market fluctuations. This can increase or reduce your interest rate, perhaps on a monthly basis, and also affect your monthly mortgage payments. Remember, you always have the option to refinance at a later date if a good interest rate comes along and you desire to change your mortgage type to a fixed rate mortgage option to secure the newer interest rate.

Refinance Loans

A refinance loan is a lot like applying for a new mortgage. You must submit the same paperwork for approval by your lender. With a refinance loan, you get to choose a new loan type, a new loan rate, and a new loan term. Along with those choices, you can also choose to take the equity from your home in cash, with a lump sum payment. You can use that cash for any unexpected expenses that you find you need help with, such as medical expenses, vehicle repair costs, or home repair/remodeling costs.

Home Equity Loans

Another option available to you if you currently have a mortgage is a home equity loan. A home equity loan also lets you access the equity in your home. Equity is the difference between what you still owe on your loan and your home’s current value. A home equity loan is also known as a second mortgage and usually comes with a lower fixed interest rate for a term of 10 or 15 years.

If you are interested in learning more about your refinance, mortgage, or home equity loan options in Smiths, Alabama , please complete the form below.

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