Which Documents Are Needed for Refinancing a Home

If you have equity in your home, you may desire to refinance to obtain a smaller monthly mortgage payment. If the interest rates have dropped, you may also achieve this by locking in a lower rate. Whatever your motive, refinancing requires a lot of documentation to prove you have the income to pay, and that you are who you say you are.

Identity

During a refinance, your credit is checked to verify any debts you have against you. A social security number is needed to run the credit check. Later, you will be asked to provide a copy of your social security card. Many banks will also request a utility bill, or a tax bill with your name and address on it. Finally, you must produce a copy of the recorded deed for your property to verify that you actually own the property.

Income

You won't be approved for the refinance if you can't prove that you can afford the monthly payments. Paystubs are needed for the past one to three months, as well as a copy of the last two years of your federal taxes. Federal taxes will also prove self-employment, dividends and rental income. Income that comes from either child support, or alimony requires that you produce a copy of your divorce decree. You can also prove child support with original court documents.

Assets

Proving your assets will also help you qualify for the refinance. Producing bank statements proves total savings, money in a checking account and the balance of a 401K. Provide investment records to prove stock and mutual funds holdings. Car titles are proof of automotive assets. Sometimes families gift other family members money. The lender will require a gifting letter to prove any amount money received from family relevant to your assets.

Insurance, Fees, and Other Documents

It is important for banks to verify that you already have adequate homeowner's insurance on your property. Be prepared to provide a copy of your homeowner's insurance. Some banks also require a copy of your title insurance. In addition, you must provide checks to cover the fees associated with refinancing. This may include an application fee, and an appraisal fee. The bank needs to make sure the home is worth more than the amount you are refinancing.

References:
Quicken Loans: Mortgage Refinancing Checklist
Chase: Applicants' Preparation Checklist: Get Organized Before You Apply