Refinancing Requirements

Usually, homeowners that refinance their mortgage typically fall into 3 main categories: they refinance to lower their mortgage rate, for cash-out and for a shorter mortgage. This is typical in a Denver refinance mortgage. 

Other reasons explore on debt consolidation (the homeowner have several ongoing debts being paid), improved FICO credit score and several others. Sound financial planning and home-ownership can translate into savings, im0roved quality of their home and an increase in their home equity position.

Where to begin

The first important task is to gauge your loan rate, its present terms, and the remaining balance. You need to know your current mortgage rate (to compare to the planned one), and the years left on your current term.

You would need to know your current balance and whether you plan to pay off your home loan with a Denver refinance mortgage. Also included here is the current value of your home in today’s market.

You have to determine your reasons for refinancing. This will help you in getting a home lender who is best suited for your goals you want to do. Speaking to an experienced loan officer can help you understand your financial profile and goals.

Important notes

Many homeowners who want to refinance are looking for a lower mortgage rate. They might be surprised to learn that they can also shorten their term without making a big impact on their mortgage payments.

Your reason for refinancing will help the loan officer with better suggested options that best fits your case.

Sometimes, a home owner’s only concern is to lower the monthly mortgage payments and still go for the 30-year term.

However, a shorter term can sometime still lower your payments. Cash-out purposes will increase your loan amount but can still lower your monthly amortization. This is dependent on how much lower a refinance rare is when compared to your current loan rate.

More reasons

Homeowners can have more reasons and goals for refinancing. Increased home value could allow for the removal of conventional mortgage insurance. Divorce can also create a reason to have one homeowner removed from the mortgage.

Sometimes, homeowners need cash to make home improvements. They may need it too for paying a child’s college education. An improved FICO credit score might also be a good reason to refinance.

Requirements

Lenders vary on what they require. This is usually after they have evaluated your information.  You may be eligible for a streamline refinance which would speed up the process and reduce the required documentation.

You will need your proof of income which will generally include whichever of the flowing to apply in your case: last 30days pay stubs, W-2 or I-9 forms for the past 2 years, tax returns for the last 2 years, commissions and bonuses for the last 2 years, alimony, and child support payments.

Needed too are your investment income records, rental income and pension or retirement income (all of which are dependent on feasibility).

The requirements for business owners (or self-employed individuals) are a bit more complicated. They may be asked to provide profit-and-loss statements, balance sheets and some various other documents.