Are you considering refinancing your mortgage? Then, you must make sure that you are prepared for the lengthy process. If you are expecting it to be a one-day process where you’ll get approval at the end of the day, you will be disappointed.
The truth is, refinances could take a month or two (or even longer) to be completed, and if there are delays in providing your lender the documents and other information that they need from you can prolong the process unnecessarily. That’s why it’s important that you have all your documents ready if you want to speed up the refinancing process.
But what documents do you need for a mortgage refinance? My Lending Pal tells you what you need to prepare:
Document Checklist for Refinance
Your lender will require specific documentation from you so they can approve your refinance application. While the types of documents you need may depend on the lender, there are some documents that all mortgage brokers ask for.
You’ll have to prove to the lender that you have a stable job and are earning enough to pay for your mortgage. If you are co-borrowing a loan with your spouse or partner, you can submit both of your pay stubs from the past two or three months.
If you are self-employed, you will have to secure copies of the last two federal ITRs and profit and loss statements so the lender can verify your income source.
W-2s, Tax Returns and 1099s
To check your income history, the lender will most likely require copies of your W-2s, tax returns, and 1099s. To be safe, you should prepare two years’ worth of information.
Just like you did when you bought your first home, your lender needs to verify that you have enough money prepared to cover the cost of closing if you aren’t able to roll them into your loan and, if needed, at least two months’ worth of payments. Get your statements for your retirement accounts, investment accounts, and checking or savings accounts as well to be well prepared.
The lender will also want to know about any debts you might have, so make sure that you get statements regarding your debts ready. This should also include expenses that you are still paying. They’d also want information on your current mortgage as well as other loans, including your student loan, home equity loan, and credit card loan, among others.
Your lender might have their own set of rules and requirements, so it’s possible that you would be asked for additional documents. For instance, if it’s reflected in your bank statements that there are recent large deposits, you may have to provide an explanation of where those came from.
Here are some of the additional documentation that the lender might ask for:
- Child support or alimony payment document
- Gift letter
- Documentation on bankruptcy that has been discharged
- Documents necessary for signing during the mortgage refinance closing
- Letters of explanation for past credit issues
- Letters of explanation about any employment gaps
- Proof of rental income if you own an investment property
Just like when applying for regular home loans, applying for refinancing can be a tedious process. Preparing all the documents mentioned above can help speed up the process as you won’t have to request more time to comply and submit them. You can expect the process to go faster and smoother when you have them on hand ahead of time. If you want to make sure that you got all the necessary documents complete, you can speak with a representative from the mortgage broker you’re considering.
If you are looking for a reliable mortgage broker, My Lending Pal is here to help you. We are one of the best Florida mortgage brokers that can provide you with tailored home loan solutions. Contact us today to know more about our refinancing requirements!