Ask the Maine Experts: How to Refinance Your Home

Refinancing can be tricky, especially in a market as red-hot as Maine’s.

Nicole Hotchkin, assistant vice president, senior retail loan officer, Camden National Bank
Nicole Hotchkin, assistant vice president, senior retail loan officer, Camden National Bank. Photographed by Ashley Conti.

With interest rates at historic lows, refinancing has never seemed more attractive. “It’s unlike anything I’ve ever seen before,” says Nicole Hotchkin, assistant vice president, senior retail loan officer with Camden National Bank. But refinancing can be tricky, especially in a market as red-hot as Maine’s. Here are some tips from Hotchkin to make it easier.

How do you know if refinancing makes sense?

Typically, if you’re going to save 1 percent or more on your interest rate, it’s likely worth it to refinance. Look at what your new monthly payment will be and how fast you can pay off the closing costs. No matter what you’re paying now, it’s worth your time to talk to an experienced mortgage lender to look at your individual situation and see what your opportunities are.

How should I choose a lender?

You want a bank that has digital tools so you can quickly and securely upload documents and complete the application online, but also has a local presence to be sure you receive the personal support and guidance you need. Working with a local bank also gives you the opportunity to drop off any important documents in person if you prefer to complete paper forms and visit the banking center. Also, you want to work with a lender who understands your community, especially if you have a unique circumstance like an island home or a seasonal property. And be sure to think about what happens after the loan closes, if you have questions or if issues come up like a job loss that may impact your ability to make your mortgage payment. You may want to work with the bank that has the capacity to service the loan, so you have a person you know who can guide you through that sensitive situation.

What are some common pitfalls to avoid?

Rates are low, and many institutions like online-only lenders are making really enticing offers. Beware, however, that they often come with hidden fees. Offers that sound too good to be true usually are.

How long does refinancing typically take?

With rates as low as they are, all lenders, underwriters, appraisers, and title companies are very busy, so you can expect it to take up to 60 days to close on your refinancing. The wait can be unnerving and stressful, especially if you’re relying on a lower monthly mortgage payment to free up capital for other expenses. You want to work with a responsive lender who can coordinate with appraisers and title companies and check on the status of your refinancing while you wait. To minimize your wait, get all your documents, like tax forms and pay stubs, together as soon as possible. If you get that initial work done at the beginning, the process will go much smoother and you’ll be able to lock in a low rate at the right time.

Camden National Bank has 60 locations throughout Maine, Massachusetts, and New Hampshire. Member FDIC |Equal Housing Lender