Mortgage Refinancing Guidelines: Every thing You Have to Refinance Your House [PDF]

Take the guesswork out of refinancing

When it comes to home refinancing, you want to know your refinancing goal, find the best lender and product to achieve it, and put together your paperwork to make it happen.

It's simpler than you think.

As long as you know what to expect and are prepared, you will likely find a solid refinance deal and save a bundle over the life of your loan.

Start your refinancing process (12/19/2021)

In this article (continue to …)

The Downloadable Refinance Checklist for Mortgage Reports

Click here to fill out the checklist online or to print it out

How To Use This Refinancing Checklist

Our mortgage refinancing checklist covers most of the basics. Find out what is important and how to properly prepare. Being ready can make the home buying process easier and safer.

Preparation is essential for a mortgage refinancing. You need to find out if it makes financial sense, learn the facts, and shop.

Keeping your paperwork in order is also crucial. Attacking these steps will save you time and worry.

Jon Meyer, The Mortgage Reports lending expert and licensed MLO, has a few additional tips to help you with your refinance checklist. He recommends:

Bring at least pay slips for the past (1) month, although lenders may ask for more. Have W2s and tax returns ready for two years for tax documents just in case. Better to have more than less documents When you print or send your bank statements, you will need the last two months or the last quarterly statement. Make sure you do all sitesEven if this field is empty, you do not necessarily need to bring your own credit report or mortgage statement; the lender can usually request this for you. Although checking them out yourself first can be helpful as it will help you understand what prices and savings to expect

Step 1: should you refinance?

Is mortgage refinancing worth it? Answer these questions to help you decide:

What are the benefits of refinancing? You may want to pay off your mortgage debt faster. Or you want to lower your monthly rate or give up private mortgage insurance. You might want to take advantage of your home's equity and do a cash out refi to fund a home improvement project. Narrow down your goals.Can you cover the refinancing costs? The closing costs and fees associated with refinancing a mortgage can often range from 3% to 6% of your outstanding balance.How long do you want to live in your house? "Before attempting a refi, you need to check that it will actually save you money," says attorney Elizabeth A. Whitman. She adds that a refi could be too expensive unless you plan to stay in place for at least three years.Can you provide a uniform proof of income? And can you count on this source of income to last for at least three years?If Cash Out Refinancing Is The Best Option, Is Cash Out Refinancing The Best Option? There are other loan options available for borrowers looking to capitalize on their home equity, such as a home equity loan or a home equity line of credit (HELOC). Inquire about alternatives before refinancing your existing mortgage.Will you be penalized if you pay off my current mortgage? Some mortgage loans have prepayment penalties. If this is the case for you, find out how expensive it can be.

Step 2: review your finances

Now is the time to do your homework. Do these tasks.

Check your credit history and history

Mortgage lenders use your creditworthiness to determine the likelihood of you paying back your new home loan. Higher credit scores generally translate into lower interest rates, which can save you thousands of dollars over the life of the loan.

You can get a free credit report from a number of online providers including

“Do this months before attempting mortgage refinancing. And correct any mistakes you see on your credit report long before you apply, ”says Whitman. "Even small changes to your report can improve your creditworthiness and result in a better interest rate."

Many lenders require a minimum credit score of 620 to refinance a traditional loan. While FHA loans and VA loans do not have loan minimums set, lenders have their own criteria – so it is important to check your price in order to get the best deal.

Check your most recent mortgage statement

Or find your original papers. Determine your current interest rate, unpaid principal and due date. This will help you understand how much you can save on your refinanced loan and what interest rate you will need to meet your goals

Find out what your home is worth

Use free online tools from Redfin,, and other websites that are interested in the current value of your home.

Avoid applying for other lines of credit

In the months leading up to refinancing, be careful not to apply for additional lines of credit such as personal loans and credit cards. "Too many credit inquiries can degrade your credit score," says Whitman.

Get refinance rates from top lenders. Start here. (19.12.2021)

Step 3: Gather the Documents Required to Refinance Your Home

Before you can request and compare refinance loan quotes, you must have the correct documentation. Gather these documents.

Proof of income: At least one up-to-date pay slip if you are a wage earnerW-2 forms and tax returns from at least the last two yearsCurrent asset or account statements (for current and savings accounts, retirement accounts and investment accounts) Note that you need all document pages, even if they are empty, and you need the last two monthly statements or the last quarterly statementDocument debts student loans, credit cards, personal loans, etc – as well as debts like child support that don't show up on your credit reportDivorce decree: if you are paying or receiving child benefit or maintenance paymentsDeclaration letter: for any shortcomings in your credit history or gaps in your employmentAward letter or proof of receipt of social security or pension paymentsRecorded act Display the rightful owners along with your title insuranceHousehold insurance shows that you have adequate coverage Basic personal information including current address and telephone number

If you are providing printed documents, submit all pages, including the blank back. If the first page says “1 of 4,” provide four pages.

Step 4: shop and ask questions

Compare mortgage rates and loan programs from multiple mortgage lenders (easy to do online). Then turn to the most competitive lenders. Prepare to ask the following questions:

Can you provide a loan estimate (LE)? "Check that estimate line by line to see the real cost," says Jacobson. "Check out the rate, APR, closing fees, and other important details," says JacobsonHow is your refinancing loan better than my current home loan? "It rarely makes sense for a borrower to refinance unless the new mortgage rate is noticeably lower than the previous one," notes WhitmanHow much interest will you pay over the life of this loan compared to the rest of my existing mortgage loan?What are the closing costs and fees? Do you offer "free" refinancing, where these costs flow into the new home loan in the form of a slightly higher interest rate?What is the due date of your loan amount? “Be careful and think about long-term goals before extending your due date. For example, consider a 58 year old borrower with 10 years remaining. There may be no point in refinancing on a 30 year mortgage, ”says Whitman. "While that can translate into lower monthly mortgage payments, he could pay off this loan well beyond retirement age."Will the mortgage be fully amortized (paid off) during the term of the loan? Or is there a balloon payment at the end? "Say it is the latter and you intend to stay in the house after the loan is repaid. Then you'll have to refinance again or have cash to pay for the balloon payment, ”warns WhitmanWill there be any tax implications for the refinancing? However, most mortgage lenders tell you it is your responsibility to find outCan the terms of this new loan change in the future?

Step 5: apply and make final preparations

Once you've narrowed your list to a preferred lender, prepare for the following.

Fill out the mortgage application

Most of the time, you are sitting with or talking to your loan officer, broker, or processor. You fill out the mortgage application (Fannie Mae Form 1003) and you sign the printed version (ask if it differs from the information you provided). "Also, read the details and whatever you sign very carefully," notes Jacobson.

Provide additional documents that your mortgage lender may ask for

“And do whatever is asked of you in a timely manner,” says Jacobson.

Stay in touch during the loan application process

“Find out who the loan officer is assigned to you. It's important to have a point of contact between now and after the closure, ”adds Jacobson.

Prepare for the home valuation

Most refinancing loans require a new home valuation to check the current value of the home.

“Before they can take the loan, your lender will commission a home appraisal. Usually you have to pay for this at the beginning of the process, ”said Vincent Geraci, Senior Vice President and Mortgage Sales Manager at Unity Bank.

There are a few exceptions to the rule, however.

Streamline refinancing programs from the FHA, VA and USDA, for example, do not require a new home appraisal. And qualified compliant borrowers can obtain a valuation waiver from Fannie Mae or Freddie Mac to avoid this fee.

Respond quickly to additional inquiries

“Once approved, the underwriter may request additional documents or conditions. This is made available in the form of a list, ”says Geraci.

“Once your review and title are received and deemed acceptable, and you have met all other conditions, the underwriter will issue a clearance to close. A closer will then contact you to plan your graduation. "

Start your refinancing

Refinancing is not easy, but it does not have to be overwhelming. And the benefits can be surprising.

Get started with your refinancing goals using the link below. Today's prices are low, so this is the perfect time to get price quotes in order to find your best deal.

Confirm your new plan (December 19, 2021)

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