Completing a loan application is the first thing you'll do when refinancing your mortgage. You may also need to provide a variety of documentation to help your mortgage lender approve you for a home loan. The documentation will vary depending on the lender you choose, your loan program, and your personal financial situation.It's also handy to have available your latest mortgage payment coupon, your mortgage note, and any payment coupons for credit cards you are paying off.
The extent of the documentation you will need to provide to your mortgage broker to get approved for a loan will depend on the type of loan you and your mortgage broker decide to use. Your mortgage broker will help you decide what amount of documentation will best fit your financial situation. Common types of documentation are Full Doc, Alt or Light Doc, Stated Doc, and No Doc. Full Doc is exactly what it sounds like you will need to provide full documentation of your income assets, etc. Alt Doc or light doc is an alternative to Full doc where rather than providing pay stubs and/or W-2s bank statements can be used to show income. Stated Doc is when as the borrower you tell the broker what your income is and do not provide additional documentation. The income must be with in reason for your type of employment and job title. For example you can not be a part time dish washer making 100K per year. No Doc is when no documentation is provided for your employment assets, etc.
As the amount of documentation decreases the Lenders take on additional risk. With the additional risk the lenders become more stringent on other qualifying factors such as credit. Rates also increase with the increased risk to the Lender.
The following is a list of documents generally required when applying to refinance. You may or may not need them all, but for a fast and easy loan process, have these items available when you're ready to complete your mortgage application.
* Proof of income Typically, you'll need to show original pay stubs for the last 30 days.
* Copy of homeowners insurance Verifies that you have current and sufficient coverage on your home.
* Copies of your W2 forms Required for each loan applicant and helps your lender verify past employment and income history.
* Copies of asset information Including accounts holding money for closing costs, statements for savings, checking and 401K accounts and investment records for mutual funds or stocks.
* Copy of title insurance Helps your mortgage lender verify the taxes, names on the title and legal description of the property.
When it comes to re-finance, it is often a good idea to consult a mortgage professional to identify a loan program that would achieve what is intended to accomplish. In addition, whether a refinance makes good economic sense also depends on the anticipated costs of the refinance transaction, which only a mortgage loan officer can provide.
Contact a mortgage professional for a complete listing of documents which you may be required to produce specifically for your state, county and loan program.
Documentation that may be needed for a refinance may include:
Last 2 Years W-2's
Last 2 pay stubs
Last 3 months statements for all asset accounts to include but not limited to: checking, savings, money market, 401K, stocks, etc. (must provide all pages for each account)
Bankruptcy paperwork (all pages of filing and discharge)
Divorce Decree (all pages of the Decree/Judgment and any attachments.)
Social Security/Pension award letters
Proof of 3 months receipt of child support/alimony
Satisfaction of any liens, judgments and/or collections that have been paid
Property tax bill
Warranty Deed
Mortgage Note
Owner's Title Insurance Policy
Prior survey
Clear copy of your Driver's License or State issued ID and Resident Alien/Green Card
Cash-out refinancing is often used for home improvements or to consolidate high interest debt.
In addition you may need your HUD (closing statement) from the closing when you last purchased or refinanced the house. This depends on what type of loan program you are choosing, usually in cash out refinance situations.
There are two types of refinances:
- Rate/Term, where you reduce your rate, payment or term (ex: 30 year fixed to a 15 year fixed)
- Cash-Out, take out more equity on your property
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