Refinance Your Mortgage: Refinancing is often used to lower your interest rate. If rates have dropped since you last financed your home, you may want to consider refinancing. Other common reasons to refinance include paying off a balloon payment, converting an adjustable rate loan to a fixed rate loan, or being able to extract cash equity from your home (cash out). A few reasons for cashing out include: home improvement, an education fund, and consolidating debt.
Refinance Your Mortgage:
REQUIRED DOCUMENTATION CHECKLIST
1. Pay Stubs
When you decide to apply for a refinance on your mortgage, we will need proof of income. We need to ensure that you have the financial means to pay off your new mortgage, as well as any other long-term debts. As a result, borrowers are generally required to submit pay stubs from the last 2-3 months.
2. Tax Returns and W-2s and/or 1099s
To provide further proof of employment and income, be sure to prepare copies of your last W-2 and/or 1099 statements and tax returns. Typically, we will ask for two years’ worth of information. These documents are necessary because they not only verify your salary but also show trends in your earnings, as well as details about investment gains or losses. Most importantly, this information can affect your total income level and subsequent loan approval amount. 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.
3. Credit Report
Before you are approved for a refinance, we will perform a credit check. While each loan program may have its own requirements, it’s always better to be safe than sorry. It is never too early to check all three of your FICO scores to make sure that you’re on the right track. Remember: the best refinance rates are almost always reserved for borrowers with the best credit.
4. Statements of Outstanding Debt
Even though we 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.
5. Statement of Assets
Similar to when you first purchased your home, verification is needed to show that you have enough cash in your savings accounts to cover any out-of-pocket closing costs and at least two months of mortgage payments. Copies of statements for saving accounts, retirement accounts, stocks, bonds, and certificates of deposits will also be needed. All of these documents will provide proof of any additional assets you own in addition to your regular salary.
Your Refi Checklist Is Complete, What’s Next?
Now that you’ve set your goals, gathered all of the necessary documents, and decided whether a mortgage refinancing makes sense for you, it’s time to move forward with the application process!
Our mission is to give you the sharpest path to homeownership, regardless of your starting point.
We’ll give you the tools to feel confident about refinancing a home, and tell you what to expect every step of the way.
Our culture is based on the simple belief that everything we do is to improve the lives of the people we serve.
Why Refinance Your Mortgage?
There are several steps you can take before and after you buy a home to make your mortgage payment as low as possible. We’ll discuss some strategies that will help you lower your mortgage payment.
Use the cash from your home to pay off higher interest, non tax-deductible credit cards, student loans, or medical bills. We’ll discuss some strategies that will help you leverage your equity to optimize benefits.
Invest some of that newfound equity into funding a business idea, or starting a college savings plan. Whatever your goals may be, refinancing a home can be a great way to free up cash and make them a reality.
Shortening your loan term may save you money on interest over the life of the loan while building equity faster. You can even set up a mortgage term that expires when you retire – how does a mortgage-free retirement sound?