Choosing to refinance your mortgage loan comes with plenty of benefits, like saving money on your interest rate and paying off your loan more quickly. However, it’s also a complex process requiring several documents to ensure you get the best deal possible. To help you get through this process as smoothly as possible, here’s a list of the main documents you’ll need when refinancing your mortgage loan.
The Loan Application
The loan application is the first step in the refinancing process. You must provide your personal information, employment status, and other details about your financial situation. Along with a bank statement or pay stub, you will need a completed tax return for the past two years and a copy of your most recent bank statement.
Based on the kind of loan you’re trying to refinance, you may need to provide tax forms. For example, if you’re refinancing a mortgage, you’ll need to provide your most recent tax return.
Statement of Income
An income statement is one of the most important documents when refinancing your loan. This document will show lenders how much money you make and how much debt you have.
Documentation for Two Kinds of Insurance
Homeowners insurance safeguards your home and belongings in the event of a fire, theft, or other covered disasters. Title insurance protects you from financial loss if there is a problem with your home’s title.
Verification of Employment
Before you can refinance your loan, your lender will likely require employment verification. This can be in the form of a letter from your employer on company letterhead or a recent pay stub. They will also ask for information about your spouse or partner’s employment, in case you need to include their income.
Credit Score and Credit Reports
A good credit score is essential for getting the best terms on a refinance loan. Lenders will scrutinize your credit reports to get an idea of your creditworthiness. In addition, you should have documentation from current and previous mortgage holders showing the remaining balance of your original mortgage before applying for a new loan.
Document of All Your Financial Assets
Before you can even begin refinancing your loan, you’ll need to put together a document of all your financial assets. This includes everything from your savings and checking account balances to any stocks, bonds, or other investments you may have.
Current Appraisal of the House
A current appraisal is one of the first things you’ll need when you’re ready to refinance your loan. An appraiser will visit your home and evaluate its value, which will help determine how much equity you have in your home.
Loan to Value Appraisal
The loan-to-value appraisal is one of the first things your lender will order. They want to know how much your home is worth so they can determine how much equity you have in your home.
You’ll also need to bring your property tax bills for the past year, evidence of any improvements you’ve made to the property, and copies of recent bank statements showing you have enough money available for a down payment on a new loan.
Make sure you choose a trusted lender like SoFi for reliable and budget-friendly refinancing home loan rates. That should help you cut down on your expenses considerably.