What Papers Do I Need to Refinance?
When you refinance a home, you must provide the lender with evidence to prove that you own the home and that you can afford to repay the loan. Lenders use similar underwriting guidelines for refinance loans as purchase loans so you need to provide your lender with many of the same documents that you provided when you obtained your existing loan.
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Property
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To prove that you have the legal right to refinance your home, you must provide your lender with a copy of your warranty deed. While neither state nor federal laws require you to obtain homeowners insurance, lenders do not finance residential property unless you have a homeowners insurance policy in place. You must provide your lender with a copy of the insurance declaration page. Additionally, if your house sits in a flood zone, you must also provide your lender with a copy of your flood insurance policy. If you have a survey of your home, then give it to the lender. Otherwise your lender will order a new survey and more than likely add the cost of it to your closing costs.
Assets and Liabilities
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Refinance loans typically involve closing costs so you must prove to your lender that you can afford to cover these costs by providing your lender with at least 30 days of bank statements. Some lenders may also request copies of your brokerage and investment statements. Your lender can obtain information about your debts by viewing your credit report but you must provide your lender with your most recent mortgage statement and a payoff quote from your current lender. Give your lender statements and payoff quotes for any other debts that you intend to pay off with the loan.
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Income
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If employed, provide your lender with your two most recent pay stubs. If retired, provide your lender with your annual award letter from your pension provider. You must also provide the lender with your Social Security annual award letter if you receive any kind of Social Security income. Provide your lender with cancelled checks and rental agreements as evidence of rental income or alimony money that you receive. Your lender may require copies of your last two years of tax returns, although some lenders instead ask you to sign a T-4506 form that enables your lender to obtain tax transcripts from the federal government.
Other Documents
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If recent credit inquiries appear on your credit report, you must write a letter explaining the reason for the inquiries and include details of any recently established credit accounts. If applicable, you must also provide your lender with documents such as a divorce decree and bankruptcy discharge papers. In some circumstances, lenders can determine the value of your home by using the appraisal that you paid for when you took out your existing loan. If you can use that existing appraisal, you should give it to your lender to avoid having to pay for a new one.
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