A Checklist of Documents for Refinancing
- Refinancing allows you to pay off your old debts.$100 house image by Paul Heasman from Fotolia.com
Refinancing is the process of replacing an existing debt with a new debt with different conditions. By refinancing, you can get a better interest rate and lower your monthly payment. Sometimes, you can also consolidate all your debts into one payment. Lenders require various legal documents before they will authorize a refinancing deal. - Personal documents include a form of ID, which could be your driver's license or other state-recognized form of photo identification, such as a passport. Other required items are your Social Security card and proof of address. The best way of showing proof of address is a utility bill mailed to your address. If you are not a U.S. citizen, personal documents can include your current passport as a form of identification.
- Since your lender will need to analyze your capability of paying off the refinancing loan, they will probably require you to provide proof of income. Some of these documents include your W2 forms for the past two years and your most recent pay stubs. Three months' worth is usually sufficient. If you are self-employed, show your tax return documents for the past two years and a statement of profits and losses for your business over the past year.
- Take documents that prove ownership of property or assets, if you have any. These might include your most recent bank account statements. This can include checking accounts, savings accounts, and retirement accounts. Investments such as stocks and bonds count as well. Include in this category any document that proves ownership of a property that is not included in the refinancing.
- Documentation of all existing debts is absolutely necessary in the refinancing process, since lenders cannot make an accurate assessment of your current situation without it. Provide documentation for any other debts you might have, such as student loans, car loans and home loans. Include how much you still owe on these debts and to whom you owe, as well as any documents that prove the payments you have already made on these debts. This category also includes any credit card debt you have, which you can show with a credit card bill. If you have any delays in any of your debt payments, provide an explanation for why you did not pay on time. If you are divorced, you also need your divorce decree document to show any alimony or child support you are paying. If you have filed for bankruptcy previously, provide all of your bankruptcy documents.
- If you are refinancing a home mortgage, lenders will require detailed information about your property. Include all the paperwork for your current mortgage and your current homeowner's insurance policy and your title insurance, which includes any information about your home, such as taxes, the location of the home and the legal owner's name.
