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As of June 25, 2018, we’ve made some changes to the way our mortgage approvals work. You can read more about our Power Buyer ProcessTM.

Check, check, check! Sometimes having a checklist in front of you can make even the most complicated tasks seem simple. It’s a point of reference that guides you along, step by step down a list of things to do.

Checklists aren’t just for grocery shopping or packing for a weekend getaway. In fact, having a checklist in front of you during the home refinancing process can come in handy!

If you’re looking to refinance your mortgage but don’t know where to start, we’ve got you covered! Check off your to-do list with our step-by-step guide of what you need to do to refinance your mortgage.

What Do You Need for Refinancing Your Mortgage?

If you’re thinking about refinancing, then you’ve most likely been around the home buying block before, and while some steps of refinancing are similar to home buying, some information still bears repeating.

Step 1: Determine Your Goals of Refinancing

The first thing you’ll want to do is determine your goals of refinancing.

Are you looking to lower your monthly mortgage payment or simply use the built-up equity in your home to pay off debt or fund home improvement projects?

Loan Options

Refinancing your mortgage allows you the opportunity to change your term: You can refinance to a longer term, like a 30-year mortgage, in order to pay less each month on your mortgage payment. In this instance, you’re taking longer to pay off your loan, but it frees up some extra cash you may need for other expenses.

On the flip side, if you’re looking to save on interest long term, refinancing your mortgage to a shorter term, like a 15-year mortgage, helps you do this because you’re paying off your home faster. In this case, your monthly mortgage payment will increase, but if your goals are paying off your home faster, this may be a good option for you.

You can even pick a custom term length that works for your specific financial goals by pursuing a YOURgage, where you can choose any term between 8 and 30 years, for a fixed-rate conventional loan.

By establishing what you want to get out of your refinance, you’re better able to decide the right term length for your situation.

Another thing to consider is your closing costs. A mortgage refinance essentially means you’re entering into a new home loan. These changes come with a price tag, which can typically be rolled into the loan amount (if you have enough equity to do that) to achieve any cash-out goals you have. Depending on your lender, these costs may include:

  • Bank fees
  • Appraisal fees
  • Attorney fees
  • Title insurance

While you may be in the market for a refinance, make sure your costs don’t outweigh the benefit of what you’re trying to accomplish. Talk with your lender about their expectations of closing costs and fees so you can figure out if a refinance is financially feasible for you.

In cases where you might not have enough equity to refinance your mortgage, there are still options for you.

For a limited amount of time, you may be eligible to use the Home Affordable Refinance Program (HARP) to refinance your mortgage. It’s a great option for people who want to refinance but may not have enough equity built up to do so.

There are a few restrictions to be aware of when it comes to qualifying for HARP refinancing, so check your eligibility with our HARP tool.

Additionally, an FHA cash-out refinance is a great option if you want to capitalize on the amount of equity in your home. In this scenario, you’re able to leave a minimum amount of 20% equity in your home, meaning you’re able to turn the rest of your equity into cash that can fund projects around your home or a savings account for college or retirement.

In order to qualify for FHA refinancing, you must be currently using your home as your primary residence.

Depending on your situation, Quicken Loans may be able to assist you with a minimum credit score of as low as 580. We also take into account your debt-to-income ratio when determining your qualification.

If you want to utilize equity, a VA loan can also be a great option for eligible active-duty service members, veterans and their surviving spouses. With a 680 median FICO score, you’re able to take out a loan for up to the full value of your home on conforming loans.

What Are the Requirements for Refinancing Your Mortgage?

In order to process your application, your lender needs certain documentation to approve you for a refinance. This documentation may vary based on the lender you’re working with, the loan program you currently have and your personal financial situation. However, there are a few items that remain consistent.

Step 2: Gather Up Documentation

There are a few documents generally required during the refinance application process. You may or may not need everything on our refinance checklist, but to ensure a fast and easy loan process, it helps to have these items available when you’re ready to complete your mortgage refinancing application.

It’s possible to avoid the mountain of paperwork, faxes and emails. Rocket Mortgage by Quicken Loans allows you to share your account information completely online.

Pay Stubs

In order to apply for a mortgage refinance, you’ll need to provide proof of income. Your lender needs to ensure that you have the financial capacity to pay off your new mortgage and your existing debt as well as to pay for your living expenses.

You and anyone else who will be a co-borrower on the loan (perhaps a partner or spouse) will need to provide pay stubs from the past two to three months. If you’re self-employed, you’ll need copies of your last two federal income tax returns as well as profit-and-loss statements in order to verify your source of income.

Start preparing now by making copies of all of these documents, as you’ll want to have these items at the ready.

Homeowners Insurance

You’ll need a copy of your homeowners insurance policy to verify that you have current and sufficient coverage on your home.

The lender may require that the value of your home is assessed. The value of your home is used to determine the amount of homeowners insurance that you need. You’ll need to contact your insurance company so that your policy can be updated according to the new value of your home.

W-2s, Tax Returns and 1099s

To verify past employment and income history, your lender will also require you to submit copies of your W-2s, tax returns and/or 1099s. Typically, lenders ask for two years’ worth of information. As a general recap, your W-2 shows your income and money taken out for taxes; a 1099 shows your income but not money taken out for taxes.

It’s important to submit these documents because they:

  • Verify your salary
  • Show trends in your earning
  • Show investment gains or losses
  • Affect your loan approval amount

Title Insurance

A copy of your title insurance will help your mortgage lender verify:

  • Your taxes
  • The names on your title
  • A legal description of your property

Since you’ve already been through the home buying process, you should already have your title insurance filed away until your lender is ready to review and verify it for your refinance.

Statement of Assets

Similar to when you purchased your first home, your lender will need to verify that you have enough cash to cover closing costs (if you can’t roll them into your loan) and at least two months’ worth of mortgage payments.

The following information is needed for your lender to assess your refi-readiness. You’ll need to provide statements from:

  • Checking/savings accounts
  • Retirement accounts
  • Stocks
  • Bonds
  • Certificates of deposit
  • Mutual funds 

Statement of Debts

While your lender will be able to view your existing debt from your credit report, you will still need to provide documentation for your financial obligations.

You’ll need account statements from:

  • Your mortgage
  • Any home equity lines of credit
  • Your car loans
  • Any student loans

 What Documents Do You Sign at a Refinance Closing?

Just like closing on a home loan, a refinance closing requires your signature on a few documents. The main document you’ll need to sign is the Closing Disclosure. The Closing Disclosure breaks down the following:

  • Loan amount
  • Interest rate
  • Loan term
  • Origination fees
  • Title insurance amount
  • Property insurance and taxes amount to be collected
  • Homeowners insurance amount to be collected

You’ll also sign a mortgage deed of trust, agreeing to use the property at collateral for repaying the loan, should you be unable. Depending on your financial situation, you might also need to sign a promissory note – another repayment agreement according to the terms of your mortgage.

Step 3: Lock Your Rate

If you’re ready to see if a refinance makes financial sense, you can get started online, or if you prefer to get started over the phone, you can talk with one of our Home Loan Experts at (800) 785-4788.

This Post Has 18 Comments

  1. Hello, I had a credit card in my name only that my husband didn’t know about and have paid it off.
    We want to refinance do I need to say I had a cr card

    1. Hi Nicole:

      That depends on a few factors. First, if you’re both going to be on the mortgage application, it would show up on your credit report. Second, even if you’re not on the mortgage application, but you’re getting an FHA or VA loan in a community property state, in most cases, we have to pull your credit as well. Outside those instances, your credit isn’t pulled if you’re not on the loan, but your income can’t be used to qualify either. I hope this helps!

  2. I Was wanting to refinance a loan that my husband and I have at the bank which is a interest only loan, but my concern is that my husband is self employed and he gets 1099’s for our taxes along with my w2 but, on his taxes by the time he deducts his phone, truck and other work related expenses it shows a loss so how would that affect my loan..?

    1. Hi Vickie:

      That could hurt your loan prospects. However, I recommend speaking with one of our Home Loan Experts at (888) 980-6716. One thing you might be able to look into is applying on your own.

  3. Thinkin about refinance of home to relieve debt from starting business last year taxes are an issue as well. Back taxes and not filed yet but have tax people on it .
    Is refi possible for me ?

    1. Hi Andy:

      I think the best thing to do in your situation would be to speak with one of our Home Loan Experts about the particulars to see whether we can help at this time. With that in mind, you can give us a call at (888) 980-6716.

  4. Would like to refi to get the pmi off my loan no outa pocket expenses is this possible.I have roughly 65,000 equity loan pay off 327,000 owned little over 1 year

    1. Hi Shane:

      Assuming the original loan balance is that $327,000 figure, you’ve paid off enough of the balance to get to roughly 19.88% equity. You would have to get to 20% equity before PMI could be taken off at your request on a conventional loan. If you already have a conventional loan, the process doesn’t actually involve refinancing. Once you reach 20% equity, you request that PMI be removed. At that point, the lender sends an appraiser to verify the value of the home. Assuming the value hasn’t decreased and you paid off 20% of the balance, PMI is then removed.

      If you have some other form of mortgage insurance through FHA or USDA guarantee fees, you would have to refinance to get mortgage insurance. We could help you look into your options through Rocket Mortgage or by talking to one of our Home Loan Experts at (888) 980-6716. Hope this helps and have a great day!

  5. I need to refinance my mortgage and assume a second mortgage. I was discharged from bankruptcy in October 2017. I have built my credit score up to 680 on Equifax and 720 on Transunion. There is $50M or more in equity in my condo. I don’t want to draw money out, just refi. I work and draw my SS. I was out of work from 2016 to 2017 due to a surgery that went bad so my tax information doesn’t look god for the past 2 years. I was told by my HOA that they are a qualified FHA HOA. Do you think I will have a problem getting a refi? I don’t want to wait too long. I have a 4.875 on my first right now. I owe about $108,000 on my first and about $47,000 on the second. The second is interest only at 3.25.

    1. Hi Sandra:

      I’m going to assume you actually mean $50,000 in equity and not $50 million. We don’t do loan amounts that high if you do. We don’t do second mortgages, but we could help you take cash out on a primary mortgage potentially. The tax info might be your biggest hurdle and coming off bankruptcy, you would have limited options, but I’m going to recommend you speak with one of our Home Loan Experts at (888) 980-6716. Hope this helps!

  6. I was trying to refinance and they told that my condo was not on the FHA since 2011. What is that mean? I can’t refinance or sell the property? What should I do?

    1. Hi Hilda:

      The FHA specifically reviews condo projects to make sure that the building standards are up to snuff and that the condo association is in good financial shape. Until your condo complex is on the approved list, you can’t refinance with an FHA loan or sell to anyone who would be using an FHA loan for financing. All hope is not lost. You can either refinance with another loan such as a conventional loan or work with your condo association to ensure things are up to FHA standards and submit for another review. If you would like to go over this and all your options, you can speak with one of our Home Loan Experts at (888) 980-6716. Hope this helps!

  7. I just got into my new home and would love to doa few things to it but I put 40k down and u no all the other stuff you buy it just cost more then you think if I had 10 thousand I could do everything I want to this house have it just the way I want it to be !

    1. Hi Kim:

      I absolutely understand where you’re coming from. One thing you might take a look at is a personal loan from our friends at RocketLoans. One of the things that’s nice about that is that you can check your options without affecting your credit score. This might be the best option because having just bought your home, you may not be able to access your home equity yet. Hope this helps!

      Kevin Graham

    1. Hi Benny:

      We can certainly help you look into your options. I want to make sure you speak with one of our Home Loan Experts because when it comes to bankruptcy, we work at the discharge or dismissal dates in determining your eligibility. You can get in touch with us at (888) 980-6716. Hope this helps!

      Kevin Graham

  8. Do not run my credit report until I have spoken to somebody my credit score is like 806 nevertheless I do not want to hard inquiries till I find out more information about it it really doesn’t sound like that good of a deal because of all the closing costs and stuff it’s just sounds a little high

    1. Hi Phyllis:

      I absolutely understand your concerns. I’m going to pass this along to our team so they know your preferences.


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