Below, you’ll see a quite exhaustive list of items you COULD very well need. Since the requirements differ depending on a number of things such as your lender, loan program and personal financial situation, you might need to provide everything described below or only a little of it though. Regardless, to make sure everything goes as easy as possible, be ready to pass these items along with your application.
Income Documentation For Each Refinancing Applicant
If you’re paid with a salary or by the hour:
- A copy of your W-2 forms from the last two years.
- A copy of your two most recent paystubs. The paystubs must clearly show the pay period and it must identify the name and social security number of the applicant.
- A phone number to your place of work for employment verification purposes.
Income Documentation For Each Refinancing Applicant
If you’re self-employed:
- Copies of your full, signed tax returns from the previous two years. If you own 25% of a company, the corporate tax returns will be needed as well as personal returns. Likewise, if you own more than 25% of a partnership, complete partnership returns from last two years, as well as complete individual returns are needed.
- A signed profit and loss statement through the most recent month.
Asset Documentation For Each Refinancing Applicant
- A copy of each of your two most recent, consecutive, entire bank statements. It’s important that every page of both statements is included.
- A copy of your two most recent statements of other assets, such as stocks, mutual funds, 401ks, IRAs, etc. And remember, if any of the statements have more than one page, a copy of every page is required.
Other Documentation
- A copy of each refinancing applicant’s driver's license.
- If you receive retirement or Social Security income you need to show evidence of this income – a recent check or bank statement showing direct deposit will do. Plus, you need to provide evidence of the terms of the pay plan.
- A copy of any home equity loans or home equity lines of credit (HELOCs) you may have.
- A copy of any Divorce Decree and Separation Agreement if divorced or separated.
- If you’ve had several jobs in the last two years, you should write a job history letter explaining the path your career has taken in recent years.
- A copy of your title insurance.
- A copy of your current homeowners insurance.
- Pass along the name and phone number of your homeowners insurance agent. Your new policy must be known and documented by your new lender.
- If you are not a U.S. citizen, please send a copy of your Visa or Permanent Resident Card.
At this point, you’re probably asking yourself why a mortgage refinancing lender needs all this information? Well, the answer comes down to two primary reasons:
- Protection for us
- It’s not uncommon for some borrowers to falsify documents or to just plain lie in the hope that they can get approved or simply get better terms. This exposes the refinancing mortgage lender to an increased possibility of loan default, since these individuals would more than likely not have been approved in the first place. In the end, we use this paperwork to gauge your ability to consistently make the mortgage payment on a monthly basis.
- Protection for you
- Documentation can serve to prevent a borrower from getting in over their head. By requiring proof of the ability to pay, we keep cash-strapped individuals from spreading themselves too thin, possibly defaulting on the mortgage, and potentially, out of bankruptcy.
So now you have the full story about what you’ll need and why it’s required. As we discussed previously, since your loan package will be at least slightly different from other clients’ – based on factors like loan program and your location – your requirements will probably differ as well. We just wanted to lay it all out on the table. Because the more prepared you are at the start, the quicker and easier it is to get you to the end – your approval. And we’ll be there with you every step of the way at 1-800-734-REFI.
