What Documents Needed To Refinance Mortgage

What Is Mortgage Refinancing

What documents do I need to refinance a car loan?

Refinancing a mortgage means you get a new home loan to replace your existing one. If you can refinance into a loan that has a lower interest rate than youre currently paying, you could save money on your monthly payment and interest you pay over the term of the loan. You might also be able to take advantage of a cash-out refinance, which allows you to tap into your home equity essentially as a lower-interest loan.

The 7 Types Of Documents You Need For A Refinance

The 7 Types of Documents

Get these documents together before you start the refinance process to streamline your loan.

With so many people filing for refinance these days, it can take a lot longer than you’d expect to have your refinance go through. You don’t have control over how backed up your lender is with applications. However, you can speed things up on your end by gathering all of the appropriate documents before starting the refinance process.

Think back to your original mortgage and all of the documents that you had to gather. For a refinance, the documentation for your refinance is pretty much the same. The overall purpose is to prove different aspects of your finances to your lender.

All lenders have slightly different requirements, but you can bet that they’ll probably ask for documents in the following seven categories:

1) Proof of income: Proving your income generally requires the following documents.

The last 30 days of pay stubs
Your current tax returns
Tax forms like W-2’s and 1099s

2) Insurance: You’ll probably need to produce documentation for two kinds of insurance:

Homeowners insurance, to verify that you have enough current coverage for your home.
Title insurance, to help your lender to check the taxes, the names on the title, and the legal description of the property.

3) Credit information: You’ll need a recent credit score and credit reports.

Your current mortgage

Other real estate

Prepare For The Appraisal

Mortgage lenders typically require a mortgage refinance appraisal to determine your homes current market value.

What to consider: Youll pay a few hundred dollars for the appraisal. Letting the lender or appraiser know of any improvements or repairs youve made since purchasing your home could lead to a higher appraisal.

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When Should You Refinance Your Mortgage

If youre considering a mortgage refinance, its important to consider whether the savings and other benefits outweigh the cost. For many homeowners, it can be wise to at least crunch the refi numbers if:

Your credit score improves: This can unlock lower rates and better loan terms
You need to pull cash out of your homes equity

There is no magical timeframe: mortgage refinancing is right for different homeowners at different times and for different reasons. Refinancing too soon after purchasing the home can have some implications such as reducing your credit score further or introducing lender wariness but in general, if the numbers are right, refinancing can be a great way to adjust your mortgage loan to suit you even better.

Before refinancing, its important to consider how long youll live in the home and how much your new loan will save you. Be sure to note how long itll take for your refis savings to surpass the new loans costs.

Be Prepared When You Apply For A Mortgage

Dont let this list scare you! Its designed to give you a general sense of the types of things you may need to apply for a mortgage. Chances are you have many of them on hand or easily accessible already! Plus, this list will enable you to gather what you need for the mortgage application process ahead of time, so things can move along smoothly when you are ready to move forward with pursuing a home loan.

Interested in learning more about preparing to apply for a home loan? Contact the experienced mortgage professionals at Maple Tree Funding today! Our team would be happy to answer any questions you may have on the application process.

Give us a call at or complete our easy online contact form to get started!

Remember Requirements Vary By Lender

When you apply to refinance, its important to understand the differences between lenders and loan programs. This knowledge can make or break your mortgage application.

A loan program is the type of mortgage you apply for. The agencies that regulate mortgage programs like Fannie Mae, Freddie Mac, FHA, VA, and USDA get to set minimum requirements for refinance applicants.

For instance, Fannie and Freddie require a FICO score of at least 620 to refinance a conforming loan, while the Federal Housing Administration only requires a 580 score for an FHA refinance.

Mortgage lenders have to follow the minimum guidelines set by these agencies.

But lenders are also free to set their own, higher standards, both for the borrower and the property. And many do.

For example, the Department of Veterans Affairs has no minimum credit score to refinance a VA loan. But many VA-approved lenders look for a score of 620 or higher.

So, just because a certain program allows a low credit score or high DTI, that doesnt mean an individual lender will necessarily approve you.

The good news is, you dont have to refinance with your current lender. Youre allowed to apply with as many mortgage lenders as you want, and find one whose standards and mortgage rates meet your needs.

Shopping around could be the difference between qualifying to refinance or not. And it could save you thousands in the long run.

Are Refinance Rates Going Down

While current mortgage rates remain low, most mortgage experts anticipate rates will continue to drift higher over the coming months and years. The Federal Reserve began raising short-term interest rates in March 2022. The Fed does not set mortgage rates, but lenders tend to increase the price to borrow money when the Fed acts.

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Are You Eligible To Refinance

Refinancing could lower your mortgage rate and monthly payments, potentially saving you thousands over the life of the loan.

Or, you could shorten your loan term, cash-out home equity, or switch from an adjustable-rate mortgage to a fixed-rate loan.

Whatever your goals, youll need to meet basic refinance requirements. These include minimum credit scores, steady income and employment, sufficient home equity, and manageable debts.

In some cases, refi requirements are even easier than those to purchase a home. So its worth checking your eligibility if you think you could save money.

In this article

What Happens If You Dont Qualify For A Va Loan

REFINANCE | Explaining Documents | Mock Loan Signing | Sample Loan Closing

VA loans are among the most flexible loan programs available today, but theres no guarantee that youll qualify. Even if you submit all of the documents above, you might still get denied. Here are some of the common reasons borrowers get denied for a VA loan even after providing their VA statement of service:

Low credit scores

The VA doesnt have specific credit score requirements, but lenders do. If your credit score doesnt meet their requirements, you may not get approved.

High debt-to-income ratios

The VA also doesnt have a maximum debt-to-income ratio requirement. They focus on a borrowers disposable income or money left after you pay your bills each month. But, like credit scores, most lenders have a maximum debt-to-income ratio theyll allow.

Not meeting the minimum service requirements

If you dont have the minimum service requirements , you wont be eligible for a VA loan no matter how good your qualifying factors are.

Low income relative to size of requested loan

If your income is low and youre requesting a higher loan amount, lenders may not feel comfortable lending you the money, even with the VAs guarantee to back them up if you default on the loan.

Unstable employment

After leaving the military, lenders may not feel comfortable lending to you if your statement of service shows instability or you dont have a job. They want borrowers with consistent income.

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Keep Tabs On Your Loan

Store copies of your closing paperwork in a safe location and set up automatic payments to make sure you stay current on your mortgage. Some banks will also give you a lower rate if you sign up for autopay.

What to consider: Your lender or servicer might resell your loan on the secondary market either immediately after closing or years later. That means youll owe mortgage payments to a different company, so keep an eye out for mail notifying you of any such changes.

Locking In Your Interest Rate

Since interest rates fluctuate frequently, things can change between the day you apply for your loan and the day you close. If you want to protect yourself against rising interest rates and ensure that the loan terms you used to build your budget are locked, you might consider locking in your rate with your lender when you fill out your loan application.

A rate lock is your lenders assurance that the interest rate and discount points are guaranteed until the rate lock expiration date. The lender will provide the terms of the rate lock to you in writing, including the agreed-upon interest rate, the length of the lock and any discount points you choose to pay.

Of course, if you believe that interest rates will decrease in the near future, waiting to lock your rate may make sense to you. In the end, its a personal choice when to lock your rate. The rate must be locked prior to the lender preparing your closing documents. Talk to your lender about the choice that best suits your needs and your preferences.

Your Refi Checklist Is Complete Whats Next

Now, that youâve set your goals, gathered all of the necessary documents and decided whether a mortgage refinancing makes sense for you, itâs time to move forward with the application process. Contact a qualified lender to get a loan estimate, submit your documents, and get started on the path to a successful refinancing.

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Come To The Closing With Cash If Needed

The closing disclosure, as well as the loan estimate, will list how much money you need to pay out of pocket to close the mortgage.

What to consider: You might be able to finance those costs, which typically amount to a few thousand dollars, but youll likely pay more for it through a higher rate or total loan amount, which also means more interest in the long run. In most cases, it makes more financial sense to pay the costs upfront if you can afford to.

Benefits Of Refinancing Your Mortgage

There are numerous benefits to refinancing your mortgage. While most of them revolve around reducing your monthly payment, a new mortgage can have a shorter term, stabilize your payment with a fixed interest rate or help you use the equity you have built up in your home. These are the most common reasons homeowners decide to refinance:

In most cases, homeowners can refinance their homes at any time to take advantage of savings or draw on some of the equity for other use. Before signing any papers and making it official, its critical to understand all the costs of refinancing. These include going over your credit profile, understanding your credit score, finding the refinance quote that reflects your best options and determining how much you will pay in upfront costs.

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Minimum Credit Score Requirements

Youre getting a whole new mortgage when you refinance. And lenders will look at your credit score and credit history just as closely as when you last applied.

As with a home purchase loan, youll have an easier time qualifying for a refinance with a good credit score and clean credit report. A great score could even earn you a lower interest rate.

Again, theres an exception for most Streamline Refinances. Often, these require no credit checks.

If youve let your credit score slide since you became a homeowner, its a good idea to boost it before you apply for a refinance. Check out our guide to improving your credit score for quick hits. Sometimes, even a small improvement can make a big difference to the rate you pay.

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Statements Of Outstanding Debt

Even though your lender will be able to see your existing debts via your credit report, you will still have to provide documentation detailing your current outstanding financial obligations. You will need to gather account statements on all remaining debts, including your existing mortgage, home equity lines of credit, car loans and student loans.

What Do I Have To Do To Apply For A Mortgage Loan

Basic Loan Refinancing Documents Explained

To apply for a mortgage loan, you will have to provide a lender with personal financial information and information about the house you want to finance.

The first step of applying for a mortgage is to request a Loan Estimate from three or more lenders.

To receive a Loan Estimate, you need to submit only six key pieces of information:

The address of the home you plan to purchase or refinance
An estimate of the homes value

The loan amount you want to borrow

Although youre not required to provide documents in order to get a Loan Estimate, its a good idea to share what you have with the lender. The more information the lender has, the more accurate your Loan Estimate will be.

Tip: Its a good idea to request Loan Estimates from several lenders. That way, you can compare your options and choose the best loan for you. Each lender is required to send you a Loan Estimate within three business days of receiving your six key pieces of information.

Once youre ready to choose a loan offer, you need to notify the lender that you are ready to proceed with the loan application. If you dont notify a lender that youd like to proceed within 10 business days, the lender may revise the Loan Estimate or close your application as incomplete and you may need to start over. The 10 business days are calculated from when the lender delivers the Loan Estimate to you or places it in the mail, whichever is earlier.

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The Bottom Line: Make Sure Youve Met All Home Refinance Requirements Before Applying

Refinancing your existing mortgage can afford you many benefits, including allowing you to borrow on your homes equity, get rid of mortgage insurance, lower your monthly payments or shorten the term of your loan. However, you should take the time to ensure you meet all requirements beforehand.

Rocket Mortgage is ready to guide you seamlessly through every step of the refinancing process. Fill out an online application today to find out which refinancing options you qualify for. You can also give us a call at 326-6018.

Get approved to refinance.

Does Refinancing Make Financial Sense

As attractive as mortgage refinancing might be, it wonât make sense if the numbers donât add up. Hereâs a good rule of thumb: if the current interest rate is at least a half percent lower than the interest rate in your existing mortgage, then refinancing may be a good option for you.

For example, if you have $390,000 remaining on an original $400,000 loan at 4.25%, replacing your current mortgage at 3.75% could save as much as $162 per month.

In addition to interest rates, homeowners also need to consider the length of the new loan term. If youâre five years into your current mortgage and refinance into a new 30-year fixed-rate loan, youâll be making monthly payments for a total of 35 years â which could result in paying more interest over the life of your loan.

If youâre having trouble determining how much you can save with a new rate, you can use a refinancing calculator to help you determine how much your monthly payment would be.

How Much Loan Can I Get On My Salary Of 15000

A: A salary of Rs. 15,000 generally falls in the category of a low-income borrower group. So, an instant personal loan app with a maximum approval amount of 1.5 Lakhs can be availed by the borrower with a starting salary of Rs. 15,000.

How much home loan can I get on 90000 salary? For instance, if your net salary is Rs. 55,000, you will be eligible for a loan of approximately Rs 33 lakhs. How to calculate your home loan eligibility?

Net Monthly Income

What Do I Do To Refinance

The first thing you must do when considering refinancing is to consider exactly how you will repay the loan. If the home equity line of credit is to be used for home renovations in order to increase the value of the house, you may consider this increased revenue upon the sale of the house to be the way in which you will repay the loan. On the other hand, if the credit is going to be used for something else, like a new car, education, or to pay down credit card debt, it is best to sit down and put to paper exactly how you will repay the loan.

Also, you will need to contact your mortgage company and discuss the options available to you, as well as discussing with other mortgage companies the options they would make available. It may be that there is not a current deal which can be met through refinancing that would benefit you at the moment. If that is the case, at least you now know exactly what you must do in order to let a refinancing opportunity best benefit you. When refinancing, it can also benefit you to hire an attorney to decipher the meaning of some of the more complicated paperwork.