What documents do I need to refinance my mortgage?

mortgage refinance documents

The process slows down when refinance demand is high. Refinance closings can take up to seven weeks on average, according to the most recent data from Mortgage Technology. However, you may speed up the process by gathering all of the documentation you’ll need ahead of time. When you submit your mortgage application, lenders will typically ask for this information, so start arranging your papers immediately.

Here are documents you’ll need to refinance your mortgage.:

  • 1. Proof of income
  • 2. Insurance information
  • 3. Credit verification
  • 4. Statements of debt
  • 5. Statement of assets



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1. Proof of income

Lenders will examine your monthly income to see if you generate enough money to pay off your new home loan and any previous obligations, as well as cover your living expenses. Your income documents demonstrate a trend in your earnings and prove how much you make.


For Salaried Employees:

Your company will usually send you pay stubs and tax forms whether you earn an annual income or an hourly payment. Contact your human resources department if you don’t have copies on file. The following is a list of items you’ll need to bring:


  • Pay stubs for the last 30 days
  • Statements from the previous two months’ bank accounts
  • Two years’ worth of signed federal tax returns (personal) or a signed IRS Form 4506-T
  • Employers’ names, addresses, and phone numbers from the last two years
  • If you have been unemployed for more than two years or had a gap in employment, you must provide a written explanation.
  • If you have a side income, bring your W-2 forms from the preceding two years and your 1099s.


For Freelancers and Independent Contractors:

Workers who are self-employed, such as freelancers and independent contractors, do not receive W-2 forms or pay stubs from their employers. You’ll need to provide various forms of paperwork to prove your income as a self-employed worker.

Using bookkeeping software, you can normally download statements from your business bank account and generate business statements. You may have a PDF copy of your tax return or be able to download one from your online tax-filing application, depending on how you filed your taxes. Here’s what you’ll probably need:

  • Signed federal tax returns from the past three years (personal and perhaps company).
  • Your most recent profit and loss statement, either quarterly or year-to-date
  • A list of all of your company’s debts
  • Personal and business bank statements over the past two months
  • Form 1084 from Fannie Mae (potentially)


2. Insurance Information

The insurance records will reveal who owns the house legally and whether you’ve kept it insured.

For Homeowners Insurance

To ensure that your home’s coverage is current, your mortgage lender will need a copy of your homeowners insurance declaration form.

They may also want the name and phone number of your insurance agent in case they have any questions. You may usually find a printed copy by logging into your account or contacting your agent if you don’t have one on file.

An assessment of the home’s value may be ordered by the lender to assist them in determining whether the coverage is adequate. If the value of your home has increased after you purchased your insurance policy, you’ll need to update the coverage limits with your insurance carrier.


For Title Insurance

A copy of the registered deed with the legal owners’ names, as well as your title insurance, which offers a legal description of your property, are required. The lender can use title insurance to verify your property taxes, which are factored into your debt-to-income ratio (DTI).
Your closing documentation should include your title insurance coverage. Whether you can’t find them, check with your original lender or title company to see if they have copies on file.


3. Credit Verification

Lenders look at your credit scores to see how well you’ve managed borrowed funds in the past. They’ll also review your credit records for things like current debt levels and negative credit events, among other things.

Your lender normally only requires your consent verbally to draw your credit, but you may need to provide extra paperwork to back up the credit check:

  • Late payments, collections, judgements, and other negative things on your credit reports will be explained in this letter.
  • If you have a bankruptcy on your credit history, you should have the discharge paperwork.
  • Statements for public utilities, phone, cable TV, car insurance, and other charges that reflect your payment history.


4. Statements Of Debt

Your debt-to-income ratio will be calculated by your lender using your current loan balances. This will assist the lender in determining if you can afford the monthly mortgage payment.

Check your online accounts or contact each lender for a copy of your most recent billing statements. These are the documents you’ll need to prove your financial obligations:

  • The most current mortgage statement for the property you’re refinancing, as well as any other properties you own.
  • For any outstanding home equity loans or lines of credit, the most current billing statement.
  • For accounts mentioned on your credit reports, such as school loans, vehicle loans, personal loans, and credit cards, the most recent monthly statement is required.
  • Payday loans, for example, are not reported on your credit reports.


5. Statement Of Assets

Your lender will need to verify that you have sufficient funds to cover the new mortgage’s closing charges. You may also need up to a year’s worth of cash reserves in the bank in some situations. These are designed to assist you in covering mortgage payments in the event of a financial hardship.

Include recent monthly statements from any account from which you want to withdraw funds or have set up cash reserves. These may include the following:

  • Bank statements for both checking and savings accounts are available.
  • Statements of retirement accounts
  • Statements of brokerage accounts
  • Statements of deposit certificates


How Long Should I Keep Mortgage Refinance Documents?

As a general guideline, save any contract paperwork pertaining to your home purchase and initial loan for the duration of the loan and sometimes, for much longer.

Because home loans might have tax ramifications, the IRS has recommendations for what documents you should maintain and how long you should keep it. For at least three years after the date of a return, you may be required to submit records that prove income, deductions, or credits claimed.

There is no statute of limitations if you fail to file a tax return in any particular year. In that instance, the IRS advises you to maintain all papers pertaining to those records for as long as possible.

To calculate capital gains, you should keep track of any substantial home renovations, such as a remodel or addition, as well as any expenses made during the purchasing and selling process, such as legal fees and agent commissions.

A capital gain is a profit from the sale of an asset that is more than the cost of acquisition. Any modifications you’ve made to your home, as well as any closing costs, are deducted from the initial purchase price. The capital gain is the difference between the sale price and the purchase price. Keeping track of these costs can help you save money on your capital gains tax.

Other loan-related papers, such as refinancing agreements, should be maintained for at least three years, though some real estate specialists advise storing it for up to ten years. That’s because you might need to refer to it if your monthly mortgage statements appear to be incorrect or if your monthly interest rate changes suddenly and unexpectedly, for example.
Monthly statements, such as those indicating paid monthly mortgage loan fees, should be kept only for as long as you think is required – perhaps a few months – to ensure the payments were credited to your account.


Refinance Documentation FAQs

It’s time to get down to business with mortgage refinancing after you’ve crunched the figures and confirmed your eligibility. It’s crucial to keep in mind that your lender will want you to provide financial and account information.

Your credit report will show you how much money you owe, but your lender will also require this information. Account statements for your mortgage, any home equity lines of credit, car loans, and student loans will be required.


What Are The Income Requirements For Refinance Mortgages?

When you apply for a refinance, your lender will examine your finances to decide the interest rate to charge, and you will be required to provide proof of income. You can make use of:

  • W-2s
  • 1099 tax returns
  • Previous work experience
  • History of earnings
  • Pay stubs (from the last 2–3 months)

If you’re self-employed, you’ll need to provide:

  • Income tax returns for the previous two years
  • Profit-and-loss statements

Pay stubs are also required for co-borrowers on the loan. These details are used by lenders to ensure that you can afford your mortgage payments in the future.


What Do I Need To Do For The Homeowners Insurance Verification?

To proceed with a refinance, you must have a current homeowner’s insurance policy with sufficient coverage to meet the lender’s requirements for the refinance amount. Check with your insurance provider to see if your coverage is adequate.


Do I Need Title Insurance?

Yes, and as a homeowner, you may already have a title insurance coverage in place to safeguard your ownership rights. This owner’s title policy is in effect for the duration of your ownership of the property. Title insurance protects you against financial loss caused by issues with your property’s title. Liens, fraud, concealed heirs, unpaid real estate taxes, and other issues are covered.

The lender’s interests are protected by a separate policy. It’s valid for as long as you have your loan, so you’ll need a new lender’s title policy each time you get a new mortgage.


Do You Need Bank Statements For Refinance?

You’ll need to give evidence to your lender to verify your employment history, creditworthiness, and general financial condition in order to apply for a refinance loan. All financial accounts, including investments, should have bank statements (for the last 2 months, all pages)


Do Lenders Look At Your Bank Account?

Yes, any depository accounts on your bank statements, including checking and savings, as well as any open lines of credit, will be scrutinised by a mortgage lender.


Why do lenders ask for Paystubs?

Paystubs, bank statements, tax returns, and other papers are requested because the lender needs to know if you can afford to make your mortgage payments.


How many Paystubs do I need for a mortgage?

Lenders want to know that you have a consistent source of income that will enable you to pay your mortgage on time each month. Pay stubs should demonstrate at least 30 days of income. Contact your employer HR representative for digital stubs if you don’t have paper copies. To find out how much mortgage you can afford, use our calculator.


How do you show proof of income for a mortgage?

Bank statements: For at least the last three months, the majority of lenders would want to see the net income displayed on payslips / earnings from self-employment to match up with the statistics on the relevant bank account.


Is a P60 needed for mortgage?

You won’t need a P60 to prove your income for a mortgage; most lenders will ask for your past three payslips, though some will additionally demand bank statements confirming the amounts from those payslips as salary credits.


The Bottom Line 

Refinancing your existing mortgage has a number of advantages, including the ability to borrow against the equity in your house, eliminate mortgage insurance, lower monthly payments, and shorten the length of your loan. Cain Mortgage is here to help you get started with your refinance by guiding you through each step.

Contact the Cain Mortgage Team today to get your Mortgage Refinance process started today.

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