Mortgage Refinancing Checklist

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 15% 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.

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 (888) 980-6716.

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