The process of refinancing your mortgage can be lengthy, sometimes dragging on for weeks. One way to speed up the process is to gather the documents needed to refinance your mortgage early so you can provide them as soon as the lender requests them. Speaking to a qualified mortgage broker in Tucson, AZ, will also help you to complete the process as quickly and efficiently as possible.
When you submit your refinancing application, you’ll need to provide proof of income, insurance and credit verification, and statements of your debts and assets. Let’s examine these documents in detail so you know what to expect.
Proof of Income
Lenders need to know that you can make the monthly payments on your home loan and keep up with your existing debts and living expenses. No lender wants you to have to choose between essentials like rent and your loan payments. Your proof of income is one of the most important documents needed to refinance a mortgage because it informs your mortgage company about your financial situation so it can determine whether you can take on more debt.
Your income documents usually consist of pay stubs, tax forms (such as W2s), and bank statements. You can request pay stubs and W2s from your employer’s human resources department. Tax returns and bank statements showing deposits will be essential if you are self-employed.
When you want to refinance your mortgage, lenders ask to see proof of insurance on the home, which will show them who owns the policy and whether you have maintained coverage. Documentation may include your homeowner’s insurance declaration page, agent’s contact information, and a deed for the home.
A lender may also request an appraisal of the home to determine its current value.
Lenders always check your credit when you apply to refinance your mortgage. You simply need to give verbal permission to allow the mortgage provider to pull your credit report.
The lender may also request additional documentation, such as a letter explaining negative items on your credit. Bankruptcy discharge papers and statements that show your payment history (such as billing statements from utilities and credit cards) may also be appropriate.
Statements of Debt
Lenders will want to look at your existing debt to compare it to your income and determine how much breathing room you have. These documents typically include recent statements for mortgage payments, credit cards, loans, and any other debts.
Statement of Assets
Finally, lenders need to check if you have funds available to cover the closing costs. Some lenders require you to have 12 months’ worth of cash in a bank account. You’ll need to provide statements for any bank account from which you’ll be withdrawing money, including checking, savings, retirement, brokerage, or certificate of deposit (CD) accounts.
Learn More About How to Refinance a Mortgage
The documents needed to refinance your mortgage comprise a lengthy list. Still, the process doesn’t have to be complicated or intimidating. Call our experts at Altitude Home Loans at 520-500-1010 for answers to all your questions, such as “When are interest rates locked in?“