- 1). Gather documents such as W-2's, pay stubs for the past 30 days, year-to-date profit and loss statements if you are unemployed, or Social Security or disability payments to verify your income. Your lender will require proof of income to refinance your mortgage. For other forms of income, such as alimony payments, pension income or child support, provide certified copies of these payments dating back at least 60 days.
- 2). Obtain copies of your homeowner's insurance to prove there is current and adequate coverage on your home. Do not worry about obtaining a copy of your title insurance; since you are refinancing with your current lender, they will have a copy of this document.
- 3). Draft a list of your assets by compiling statements for checking and savings accounts, 401(k) accounts, mutual funds, stocks and bonds. Simultaneously compile a list of your debts, such as car loans, student loan balances and credit card balances. Include a copy of any bankruptcy proceedings if you have filed for bankruptcy and include an explanation letter for doing so. Your lender will use your asset to debt ratio to determine if extending a home refinance loan is a viable option for the company and a feasible goal for you as a homeowner.
- 4). Contact your lender's refinance office and ask for a home refinance application. Complete the application in detail using the income, ownership, asset and debt documents you previously collected.
- 5). Return the refinance application to your lender and wait for them to verify your financial and employment information, in addition to pulling your credit report. In the meantime, ask your lender about the settlement costs for refinancing. The benefit of refinancing with your lender should include lower settlement costs. Consider asking competing lenders about their settlement costs for refinancing your home loan and use these figures as a bargaining tool with your current lender, if you think the settlement costs are too high. Also ask if your refinance loan has a prepayment penalty. According to the Federal Reserve Board, some lenders charge if you pay off your mortgage loan early, but in cases where a refinance takes place with the same lender, borrowers can request the lender to waive the prepayment penalty.
- 6). Attend the refinance closing once your lender has verified your information and approved your refinance loan. Read the fine print on all documents and ask the closing attorney to clarify any questions throughout the closing process; do not sign the refinance agreement until you get clear and complete answers.
- Advertisement -
- Advertisement -