Why having a mortgage refinance checklist is important
When refinancing a home, you want to know your refinance goal, find the best lender and product to achieve it, and get your paperwork together to make it happen. It’s easier than you think, so let’s get started.
Why having a mortgage refinance checklist is important
The mortgage refinance checklist below covers most of the bases. Learn what’s involved, and how to prepare properly. Being ready can simplify the process and provide better peace of mind.
Preparation is vital prior to applying for a mortgage refinance. You have to do the math and figure out if it makes financial sense. Plus, you need to learn the facts and shop around. Getting your paperwork in order is crucial, too. Tackling these and other steps will save you time and worry.
“For example, say you don’t have your current mortgage statement and terms in front of you when you apply. That means you have to estimate your figures,” says Sandy Krestan, mortgage loan consultant with The Krestan Team at Fairway Independent Mortgage. “But that makes it impossible to compare lenders or loan products accurately.”
Step 1: Ask yourself questions
Is a mortgage refinance worth it? To help you decide, answer these queries:
What will a refinance accomplish? Maybe you want to pay off your mortgage debt quicker. Or you may want to lower your monthly payment. Perhaps you seek to tap into your home’s equity and pursue a cash-out refi to fund a home improvement project. Narrow down your goals.
How much longer do I plan to live in my home? “Before attempting a refi, you need to evaluate whether it will, in fact, save you money,” She adds that a refi might be cost prohibitive unless you plan to stay put for at least three years. But everyone person is different. I always say “it is better to know than not know…”.
Will I be penalized for paying off my current mortgage? Some mortgage loans apply prepayment penalty fees. If yours does, find out how costly this can be.
Step 2: Conduct research
Now it’s time to do your homework. Complete these tasks:
☐ Have our Team check your credit score and history. “Do this months before attempting a mortgage refinance. And correct any errors you see in your credit report long before applying,” says Sandy. “Even making small changes on your report can improve your credit score and result in a better interest rate.”
☐ Examine your most recent mortgage statement. Or find your original paperwork. Determine your current interest rate, unpaid principal balance, and maturity date.
☐ Learn what your home is worth.Call our team so you can order an appraisal before you apply.
☐ Avoid applying for other types of credit. “Too many credit inquiries can result in a reduction of your credit score,” says Krestan.
Step 3: Collect the paperwork
Before you can request and compare refinance loan offers, you need the right records in hand. Gather these documents:
☐ At least two recent pay stubs, if you’re a wage-earner
☐ Tax documents from at least the last two years (W-2s if you’re a wage earner, 1040 tax returns with supporting schedules and forms for self-employed or commissioned applicants)
☐ Recent asset statements (for bank accounts, retirement plans and investment accounts)
☐ Homeowner’s insurance declarations page
☐ Divorce decree, if you pay or receive child support or alimony payments
☐ Letters of explanation for any dings in your credit history or gaps in your employment
☐ Award letter or proof of receipt of social security or pension payments
If providing printed documents, submit all pages, even the blank one at the back. If the first page says “1 of 4” on it, provide 4 pages.
Step 4: Apply and make final preparations
Call my team at 480-420-7107 or 602-820-5166:
☐ Complete the mortgage application (Fannie Mae Form 1003). We can take in person, over the phone or you can apply online in a secure portal.
☐ Provide additional documents your lender requests. “And complete everything asked of you in a timely manner,” Sandy says.
☐ Stay in contact. Ask questions when you have them.
☐ Prepare for the appraisal. “Before they can underwrite the loan, your lender will order an appraisal.
Respond quickly to additional requests
“Once approved, the underwriter may require additional documentation or conditions. This will be provided in the form of a list,” Sandy says.
“Once your appraisal and title are received and considered acceptable, and you have satisfied any other conditions, the underwriter will issue a clear to close. A closer will then reach out to you to schedule your closing.”
Have questions, we are here to help. You can check us out online at www.SandyKrestan.com
