When you go for refinancing there is a need for paper work to be done before you continue. Many people turn to refinance professionals to complete the refinance procedure while some others prefer to do it themselves.

The first thing you will do when refinancing your mortgage is completing a loan application. An array of other documents might be needed to help your mortgage lender approve you for a home loan. These credentials vary according to the lender you choose, which loan to want to refinance, your credit profile and your personal financial situation. Generally, the following is a list of documents is required during the refinance application process. You may or may not need everything mentioned but to speed up simple loan process, have these items available when you’re ready to complete your mortgage application.

Proof of income: This proof is needed to verify the income of borrower. You will need to show original pay stubs for the previous month.

Copies of your W2 forms required for each loan applicant and helps your lender verify past income history and service terms.

Copy of homeowners insurance. Homeowners insurance is required by all lenders to protect their investment, and must be obtained before closing on your loan. In most cases, coverage must be at least equal to the loan balance, or the value of the home. They verify that you have current and sufficient coverage on your home.

Copies of asset information. The asset information includes accounts holding money for closing costs, statements for savings and investment records for mutual funds or stocks.

Copy of title insurance. Title insurance protects a lender against any title dispute that may arise over a particular property. It is required to close on your home. You may also buy title insurance which protects you as the homeowners. This helps your mortgage lender verify the taxes, names on the title and legal description of the property.

Once you have begun the refinance process, refinance expert will tell you which documents you will need to get approved. They may vary depending on where you live and which loan program you have selected. But keep in mind – the more information you have ready before you apply, the less time it will take to get approved and close your loan.

You must be ready for the closing fee associated with refinancing. Generally, you will need two percent of the buy price for prepaid interest to cover the time between the date you close your loan and the date you make your first mortgage payment. Some states may also require prepayment of property taxes. With refinancing your ancient mortgage you will most likely have money in an escrow account that can cover these costs. Some borrowers get small-term loans while their escrow transfers back to them, but most pay the money at the closing knowing they will get it back when their escrow is returned.

But, you may be able to eliminate some closing costs. For instance, your lender might be able to reuse your last home appraisal or your credit report if they’re recent enough. Another option may be to have your mortgage lender re-certify some documents (appraisal, title, etc.) for less than the cost of getting new ones.

Nazir Hussain
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