What Documents Do You Need To Refinance A Mortgage? | Quicken Loans (2024)

FAQs

What Documents Do You Need To Refinance A Mortgage? | Quicken Loans? ›

To start the refinancing process, you will need to provide several documents, including recent pay stubs, W-2 forms, 1099 forms, tax returns, bank statements, homeowners insurance and proof of assets and debts. These refinance documents help the lender assess your financial stability and eligibility.

To start the refinancing process, you will need to provide several documents, including recent pay stubs, W-2 forms, 1099 forms, tax returns, bank statements, homeowners insurance and proof of assets and debts. These refinance documents help the lender assess your financial stability and eligibility.

Property-Related Documentation

Homeowners Insurance: Proof of homeowners insurance coverage is a lender requirement. Property Appraisal: Lenders often conduct a new appraisal to assess your property's current value, affecting your refinancing terms and loan-to-value ratio.

To apply for a refinance loan, you'll need to provide your lender with documentation to help verify your employment history, creditworthiness, and overall financial situation. If you're applying with someone else (called a co-borrower, such as your spouse), they will also need to provide the same documents.

Homeowners are commonly disqualified from refinancing because they have too much debt. If your DTI is above your lender's maximum allowed percentage, you may not qualify to refinance your home. A low credit score is also a common hindrance.

Just like with your original mortgage, you'll need to provide some documentation to verify your income for a refinance. This will typically include: 2 years of personal tax returns. 2 years of business tax returns (if you own more than 25% of a business)

Full Doc Loans, also known as fully documented loans, are a type of mortgage where the borrower provides complete, comprehensive information needed by the lender to assess their creditworthiness. This includes income, assets, and employment verification.

The first step in the refinance process is to set a clear goal. Figure out what benefits you want from a mortgage refinance and what type of loan will help you get there. There are a number of reasons homeowners choose to refinance.

What's the downside to refinancing? ›

Refinancing allows you to lengthen your loan term if you're having trouble making your payments. The downsides are that you'll be paying off your mortgage longer and you'll pay more in interest over time. However, a longer loan term can make your monthly payments more affordable and free up extra cash.

You pay closing costs and fees when you close on a refinance – just like when you signed on your original loan. You might see appraisal fees, attorney fees and title insurance fees all rolled up into closing costs. Generally, you'll pay about 3% – 6% of your refinance loan's value in closing costs.

You don't need a down payment to refinance, but you'll likely have to come up with cash for closing costs. Some lenders let you roll closing costs into the mortgage to avoid upfront expenses. You can also try negotiating with the lender to waive them.

An appraisal for a refinance is part of the underwriting process for a new mortgage. Appraisers look at various factors, including your home's location and its size, layout and improvements. Many lenders will not approve a refinance without an appraisal.

Conventional refinance: For conventional refinances (including cash-out refinances), you'll usually need at least 20 percent equity in your home (or an LTV ratio of no more than 80 percent). This also helps you avoid private mortgage insurance payments on your new loan.

You'll need to bring a state-issued photo ID and a cashier's check or wire transfer to pay for outstanding items or closing costs that aren't rolled into the loan. You'll be asked to review and sign several documents, including affidavits and declarations.

One of the best and most common reasons to refinance is to lower your loan's interest rate. Historically, the rule of thumb has been that refinancing is a good idea if you can reduce your interest rate by at least 2%. However, many lenders say 1% savings is enough of an incentive to refinance.