![]() W-2 forms and tax returns from at least the last two years.Proof of income: At minimum, one recent pay stub if you’re a wage-earner.Step 3: Collect the documents needed to refinance your homeīefore you can request and compare refinance loan offers, you need the right records in hand. Get refinance rate quotes from top lenders. “Too many credit inquiries can result in a reduction of your credit score,” says Whitman. In the months leading up to refinancing, be sure not to apply for additional lines of credit, such as personal loans and credit cards. Use free online tools from Redfin,, and other sites that estimate your home’s current value. This will help you understand how much you stand to save on your refinanced loan, and what rate you need to achieve your goals Learn what your home is worth Determine your current interest rate, unpaid principal balance, and maturity date. Examine your most recent mortgage statement While there are no credit minimums set for FHA loans and VA loans, lenders will have their own criteria - so it’s important to shop your rate around to get the best deal. Many lenders require a minimum credit score of 620 to refinance a conventional loan. “Even making small changes on your report can improve your credit score and result in a better interest rate.” And correct any errors you see in your credit report long before applying,” says Whitman. “Do this months before attempting a mortgage refinance. You can obtain a free credit report through various online vendors, including. Higher credit scores generally fetch lower interest rates, which can save you thousands of dollars over the life of the loan. Mortgage lenders use your credit score to determine how likely you are to replay your new home loan. If yours does, find out how costly this can be. Will you be penalized for paying off my current mortgage? Some mortgage loans apply prepayment penalty fees.Explore alternatives before setting on refinancing your existing mortgage. If cash-out refinancing, is a cash-out refinance the best option? There are other loan options for borrowers who want to leverage their home equity, such as a home equity loan or a home equity line of credit (HELOC).Can you show consistent proof of income? And can you count on this source of income continuing for at least three years?.She adds that a refi might be cost-prohibitive unless you plan to stay put for at least three years. How much longer do you plan to live in your home? “Before attempting a refi, you need to evaluate whether it will, in fact, save you money,” attorney Elizabeth A.Can you cover refinance expenses? The closing costs and fees associated with refinancing a mortgage can often equate to 3% to 6% of your outstanding balance.Perhaps you seek to tap into your home’s equity and pursue a cash-out refi to fund a home improvement project. Or you may want to lower your monthly payment or drop private mortgage insurance. What will a refinance accomplish? Maybe you want to pay off your mortgage debt quicker.Is mortgage refinancing worth it? To help you decide, answer these questions: Though it may help to check them on your own first, as this will help you understand what rate and savings you should be in line for You don’t necessarily need to bring your own credit report or mortgage statement the lender can typically request these for you.Make sure to include all pages, even if blank When you print or send your bank statements, you’ll need the past two months or the most recent quarterly statement.It’s better to have more documentation than less In terms of tax documents, have two years worth of W2s and tax returns ready, just in case.Bring pay stubs for the past (1) month at minimum, though lenders may ask to see more.Jon Meyer, The Mortgage Reports loan expert and licensed MLO, has a few extra tips to help you with your refinance checklist. Tackling these steps will save you time and worry. ![]() Getting your paperwork in order is crucial, too. You have to figure out if it makes financial sense, learn the facts, and shop around. Preparation is vital for a mortgage refinance. Being ready can simplify the home buying process and provide greater peace of mind. Learn what’s involved, and how to prepare properly. Our mortgage refinance checklist covers most of the bases. Click here to fill the checklist out online or print it How to use this refinance checklist
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