You’ve been working hard to pay your mortgage bills on time and build equity in your home, and now you’re ready to refinance your home. Congratulations on taking this big step! This checklist will help you prepare for the home loan refinancing process.

Below is everything you’ll need to make sure you’re ready to refinance: from determining your terms and options with a free mortgage refinance calculator to the important documents you’ll need in hand. Once you have everything you need at your fingertips, you can relax. With the right lender and information at the ready, your refinance should be smooth and stress-free.

Do some math ahead of time

If you’ve decided to refinance, you’ve probably already determined your financial goals. You may want to tap into your home’s equity to fund a home improvement project, or maybe you’re just looking to pay off your mortgage debt more quickly. Whatever your goal, it’s best to prepare by doing a few calculations up front. You can use our free mortgage refinance calculator to get a sense of the overall cost of refinancing.

Other ways to prepare include:

Check your credit score and history

Mistakes happen. That’s why it’s good to check out your credit report before you begin the refinancing process. You can access a free copy of your credit report online. Make sure to correct any errors you find. Doing this ahead of time will allow creditors to make any needed alterations. You’ll want to make sure your total credit score looks good as well. Many lenders require a minimum credit score of 620 in order to provide refinancing.

The mortgage lender uses your credit score to decide how risky it is to lend you money. The lower the risk, the lower your interest rate is likely to be. A lower interest rate, even if it’s a difference of 0.5%, can save you a lot of money over the life of your loan. Even a small bump in your credit score can result in a better interest rate on your refinance, so make sure everything looks ship-shape on your credit report before you apply.

Tip: Avoid applying for other lines of credit in the months leading up to your refinance. Overreliance on personal loans or credit cards can also affect your credit score.

Check your mortgage statement

Whether it’s your most recent mortgage statement or your original paperwork, that paperwork should list your current interest rate, your unpaid principal and the maturity date of your loan. You’ll also want to know how much your home is currently worth, something you can check for free online. All of these numbers will help you calculate the interest rate you should look to achieve.

Prepare for a new home appraisal

Most home refinancing requires that the lender get a current appraisal of your home. Depending on your lender, you may need to pay for this service up front. Make sure you add this cost into your refinancing budget and allow time to schedule and obtain an appraisal before you apply.

Get your documents ready

With a little effort ahead of time, you can make sure that when you’re ready to refinance, you have everything you need right in front of you. Along with basic information—your name, address, phone number and ID—you’ll need these things:

  • Proof of income: You’re likely to need your last three pay stubs. If you’re missing any, your employer or the institution where your checks are deposited should have a copy.

  • W-2 forms and tax returns: You’ll need all your tax paperwork from at least the last two years.

  • Documentation of debt: You’ll need documentation of any outstanding debt. This could include credit card debt or student loans as well as ongoing payments against your income, such as child support or alimony.

  • Divorce decree: If any part of your income is derived from a divorce settlement, you’ll need access to that paperwork.

  • Recent bank statements: You should have paperwork for all savings and checking accounts in your name. Retirement account statements will also need to be provided to the lender. This includes even the blank pages of your statements, all going back at least two months.

  • Deed and insurance: You’ll need to prove you’re the legal owner of the home and that you have title insurance. You’ll also need to show that you have sufficient homeowner’s insurance coverage.

  • Letters of explanation: If you earn income outside of your paycheck, you’ll need to provide an “award letter.” This income could be a pension or severance package or some form of social security. Likewise, if you have any gaps in your employment history or any significant flaws in your credit report, you’ll want to provide a letter explaining the circumstances of those events.

Finish your preparations and apply

After you’ve done your homework, you’ll want to look for a lender. You can get quotes from lenders such as Solarity Credit Union online and make comparisons. Make sure to check out the APR*, interest rate and closing fees. Don’t be afraid to ask questions. You’ll want to make sure you work with a lender you can trust. Once you’ve chosen a lender, you can begin the process.

What to expect

Whether you meet with your lender virtually or in person, they’ll have you fill out a standard mortgage application. Depending on your circumstances, your lender may request additional documentation. Make sure you provide anything they request in a timely manner. Staying in touch with your lender and making sure they have all the documents they need will help your refinance move smoothly and quickly.

When it’s time to close, Solarity offers an eSigning option, which can help make your refinance process easier to complete. Otherwise, you may need to appear in person to sign your refinance paperwork.

If you’re just beginning the refinance process, it’s a great idea to get as much information as possible. A lot of information is available online. Start with Solarity’s free mortgage refinance calculator to see what your options are. You can also contact a Solarity Home Loan Guide for more information if you have any questions about the process.

*APR = Annual Percentage Rate

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