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What Documents are Required to Refinance a Mortgage?

EMS Blog 2 Banner - Dec 2022 -What Documents are Required to Refinance a Mortgage
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Refinancing your mortgage means paying off or renegotiating your current mortgage and replacing it with a new one. Often, this new mortgage has a better loan term and rate, which can then lead to a lower monthly mortgage payment and more savings.

However, just like with a regular home loan, the mortgage refinance process can be lengthy. And taking your time to provide your mortgage lender with the necessary documentation can increase the timeline even further. So if you're planning to have a streamlined mortgage refinance, then you need to be prepared.

What documents are required to refinance a mortgage? To help you out, this blog will go over some of the documents you'll need for a smoother refinance process.

Proof of Income

Lenders will want assurance that you can make your monthly mortgage payments, manage your existing debts, and still have enough cash left for your day-to-day living expenses. Your income documents will verify how much income you get and the stability of your earnings.

For Employed Borrowers

Salaried employees typically receive tax forms and pay stubs from their employer. These documents can serve as proof of regular income. If you don't have a copy of these on file, you can contact your human resources department. Here is a list of documents you need for a refinance as a salaried employee:

  • Last two years' worth of W-2 forms
  • Previous 30 days' worth of pay stubs
  • 1099s if you have a side income
  • Bank statements on all accounts from the previous two months
  • Signed personal federal income tax returns from the previous two years or a signed IRS Form 4506-T
  • Names, addresses, and contact details of your employers from the last two years
  • If you have an employment gap or you were employed for less than two years, you have to provide a written explanation as to why.

For Self-employed Borrowers

Self-employed workers can include business owners, freelancers, and independent contractors. And since they don't have employers who will provide them with pay stubs or W-2 forms, they need to show other types of documents to verify their income. Here are some of the documents lenders might require from self-employed borrowers:

  • Personal federal tax returns from the last three years
  • Business federal tax returns from the last three years
  • Year-to-date profit and loss statements
  • Last two months' worth of personal and business bank statements
  • List of all business debts and monthly payments
  • Potentially a Fannie Mae Form 1084 for cash flow analysis

Insurance Information

Mortgage lenders would require your insurance information to verify the legality of your homeownership. This information will also show whether you've maintained the coverage on your home.

Title Insurance

Your title insurance policy is meant to protect you from losses that might occur if ever the title to your property is not free or clear of defects. This document, along with a copy of the deed with the names of all legal owners, will be one of your refinance requirements. Moreover, your title insurance can also help verify your property taxes.

You can find your title insurance policy in your closing documents. If you've lost them, you can ask the title company or your previous lender if they have a copy on file.

Homeowners Insurance

Your homeowner's insurance policy is used to help you rebuild your property in case of destruction or damage. And just like homeowners insurance is required when you're obtaining a loan, it will also be necessary when you're applying for a refinance.

To ensure that the coverage on your home is current, your mortgage lender will ask for a copy of your homeowner's insurance. The lender might also order a home appraisal. This is to verify that your homeowner's insurance policy coverage is still sufficient. And if it's not enough, you will have to work with your insurance company to update the coverage limits.

Credit Verification

Your credit score is probably the most important three-digit number in your adult life. It will be used to determine how well you handle your debts. Your lender will also ask your permission to pull your credit report so they can check your debt balances and see if there are any negative credit events. They might also ask for additional documentation to help with the credit checking:

  • Bankruptcy discharge papers if there's bankruptcy in your credit history
  • Explanation letter for any derogatory items on the credit reports such as late payments or collections
  • Payment history statements for phone, car insurance, public utilities, and other expenses.


Statements of Debts

Your lender would want to determine if you can afford a new home loan. To do this, they would have to calculate your debt-to-income ratio by checking all your existing debts and expenses. These are some of the documents lenders will require to verify your financial obligations:

  • Recent mortgage statements on your current loans
  • Recent billing statements for home equity loans or lines of credit
  • Recent monthly statements related to student loans, credit cards, car loans, or any other account listed on your credit reports
  • Any other debts that are not listed on your credit reports

Statement of Assets

Your lender would want to verify whether you have enough cash to cover the closing costs on your new mortgage, as well as cash reserves that can cover at least 2 to 12 months' worth of monthly payments in case of an emergency. To do this, you'll have to provide recent statements from:

  • All bank statements for checking and savings accounts
  • Retirement accounts
  • Brokerage accounts
  • Certificates of deposit

Extra Documentations

You might also need to prepare additional documents depending on your lender. For example, if there's a recent large deposit made on your account, you'll have to explain where that came from. Here are other examples of additional documentation that might be asked of you:

  • Documentation for child support
  • Documentation for alimony payment
  • Documentation for discharged bankruptcy
  • Explanation letter for gaps in employment history or previous credit problems
  • Gift letter and other related paperwork
  • Proof of rental revenue for any investment assets

Need Help With Your Mortgage Refinance?

Preparing all these documents you need for a refinance beforehand might make the process smoother. However, if you really want to have a stress-free refi, then you'll need to work with a mortgage broker.

At Ebenezer Mortgage Solutions, we'll submit your application to multiple lenders so you don't have to. This will get you access to expert-recommended refinance options that will suit your financial situation.

If you're ready to refinance your mortgage, let us know by calling (813) 284 - 4027 so we can immediately start working on it.

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