For any homeowner interested in refinancing a mortgage, documentation will be needed and requested by the lender regarding information on the property and on the financial situation of the individual. Some documentation will be requested by the lender on your behalf, while other documentation you will need to produce from your own records. It is a good idea to be aware of what documents you will need before you submit a mortgage application with a mortgage professional.
Property Information
• Appraisal
Calculating the current value of the property is determined in most cases by an appraisal. An appraisal is performed by a licensed appraiser who will calculate a current market value of the property being refinanced. This amount will determine how much you can refinance for. An appraisal is usually ordered by the lender after a mortgage application has been received. Payment for the cost of an appraisal is usually required at the time of appraisal, with this cost being paid by the homeowner.
• Title documents
The title company handling the refinance will request a copy of the title policy and warranty deed, along with a copy of the current mortgage statement. This is needed in order for the title company to clear the title on the property, as well as to request a mortgage payoff from the current mortgage holder. Additional documentation requested may involve current homeowner insurance policy and homeowner association information (if there is a homeowners association). If this documentation is not provided by the homeowner, it could take longer for the title company to conduct the necessary title related work and thus delay the closing on mortgage refinance.
Personal Financial Information
As when applying for any loan, personal financial information will be requested by the lender. Documentation detailing income, assets, and liabilities will be needed. Income may be verified by submitting paycheck stubs or a W-2 or income tax returns. Information for the last two years of employment is the standard period of time. Assets may be verified by submitting bank statements and statements for the last two months of any investment accounts.
Liabilities may be verified by the lender by pulling a tri-merge credit report. This report cannot be pulled unless written authorization is given by the homeowner. This credit report will also provide to the lender the current credit scores, which is used to determine what type of loan program you qualify for.
Gathering these documents before you apply for a mortgage will help simplify the mortgage application process. It may also help shorten the processing time of the loan by the various parties. Consult with a local mortgage professional for more information.