Refinance with a Fixed Rate Mortgage

Credit Score Basics

When you buy or refinance, your credit score is one of the first things a lender looks at. It helps them determine if you qualify for a loan, and what interest rate they can offer you.

Factors that affect your credit score:

• Length of Credit History
• Amounts Owed 
• Payment History 
• New Credit 
• Types of Credit Used
• Derogatory Credit

Your credit score reflects how reliable you are as a borrower and is determined by your track record of borrowing and repaying banks, credit card companies and other lenders.

Factors that may determine your rate:

Lenders start with the par rate, then look at your risk profile to determine what rate they will offer you. Rates are usually based on a combination of the following factors:

• Down Payment
• Loan terms
• Loan to Value Ratio (The percentage of the lesser of the sales price/appraised property value that is borrowed from a bank or lender. A down payment of 20% would create a loan-to-value of 80%).
• Points 
• Loan Product

Escrow Basics

Escrow Payment – That portion of a mortgagor's monthly payments held by a lender or servicer in an account to pay taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also called impounds or reserves in some states.

An Escrow Account on your loan allows PNC to make payments for certain bills related to your property, such as real estate property taxes, homeowners insurance, flood and other property related insurance, and mortgage insurance. Home buyers are generally required to have an escrow account until a certain loan to value ratio is met.

Escrow Analysis – The periodic examination of escrow accounts to determine if current monthly deposits will provide sufficient funds to pay taxes, insurance, and other bills when due.

Your annual Escrow Analysis Statement contains all the information you need to understand your previous and projected mortgage payments. 

Refinancing Demystified

Learn more about refinancing and how to find out if the process could be worth it for you.

Looking to refinance? See options to lower your interest rate, payment, change terms, consolidate debt/get cash out, or take advantage of specialized loan products and programs.

Which lending option is right for you depends on a number of factors, such as how much equity you have, how long you plan to stay in your home and if you want to receive money back. Before you decide, you should understand the basics.

To apply for a refinance, you’ll need to provide information about your income, assets and debts, plus any special circumstances that may impact your ability to repay.

In addition, the lender will arrange for an appraisal of your home, flood determination, a title search and title insurance. They may also set up an escrow account to pay for necessary insurance and property taxes.

You can often get a commitment letter from your lender in as little as 48 hours, once your paperwork is complete.

Use this list to gather the documents you’ll need to refinance.

To apply for a refinance, you’ll need to provide information about your income, assets and debts, plus any special circumstances that may impact your ability to repay.

In addition, the lender will arrange for an appraisal of your home, flood determination, a title search and title insurance. They may also set up an escrow account to pay for necessary insurance and property taxes.

Be prepared to provide some or all of the items below:

Income Verification

• Pay stubs for the last 30 days
• W-2 forms for the last two years
• Child support/alimony – Child support agreement and/or divorce decree and/or 12 months cancelled checks
• Award letter/1099 for social security, pension and disability

       If You Are Self-Employed

• Signed, completed tax returns for the past two years, including personal, partnership, and corporate, if applicable, including all schedules.
• Year-to-date business profit and loss statement for current year, if more than three months have passed since the end of the tax year
• Current balance sheet

Property Information

• Most recent property tax bill
• Current homeowner’s insurance policy, and flood any other property related insurance, such as flood insurance, if applicable

Assets

• Original bank statements for the last three months, including savings, checking, investment accounts, and retirement accounts
• Stocks and securities account statements for the last three months

Payment History

• Child support/alimony
• Bankruptcy/Consumer Credit, if applicable

Additional Information, If Applicable

• Explanation of discrepancies on credit