How To Refinance

Now that you’ve decided you need to refinance your mortgage, the first step is getting pre-approved.

Just like when you purchase a home, prequalifying determines the maximum loan amount you can afford and how much you’ll be able to borrow.

Your credit score isn’t the only thing that decides whether or not you can get a loan, but it is important and determines what you’ll qualify for. Here are some things you should do:

• Know your credit score before meeting with a lender. You should at least have this knowledge beforehand.
• Verify the accuracy of your credit report. If you find any errors, dispute them with the credit bureau as soon as possible. Unresolved disputes can lower your credit score and might delay your loan being approved.
• Pay down high balances. Having lower balances (and a better ratio of available credit) can have a positive effect on your credit score. A few points might be the difference between Very Good and Excellent credit!
• Set up payment plans for delinquent accounts. If you have any delinquent accounts, work out a payment plan with your creditors that doesn’t have a harsh effect on your debt-to-income ratio, but still demonstrates that you are serious about meeting your financial obligations.

Contact Great Northern Mortgage today to discuss your options and get started. Together, we’ll determine a product that will accomplish what you need. If you’d like to do a little research on your own first, visit our Loan Types page that explains many of our products. However we do recommend having a discussion with one of our loan consultants who will help you assess your situation and make a recommendation.

Once you’ve selected a lender and prequalified, it’s time to meet with your loan officer and gather the necessary paperwork.

Identity and Income Information

• Your full legal name, Social Security Number, and date of birth. You may need to provide a copy of your Social Security Card
• Your phone number, email address, and all residential mailing addresses from the past two years
• Your primary and secondary income sources
• Government issued photographic ID
• All employer names, addresses and phone numbers for the past two years
• The values of your bank, investment and retirement accounts
• Your monthly debt obligations
• The address of the mortgaged property, the year it was build, estimated home equity and value
• History of property taxes, insurance, and HOA fees (if applicable)

Income Information for Self-Employed Borrowers

• Personal and business federal tax returns for the past two years
• Year-to-date profit and loss statement
• A full list of all business-related debts

Credit Information

• Letter of explanation for late payments, judgments, etc
• Source of funds documentation for and large deposits on bank statements
• Judicial decree or court order of any obligations due to legal action
• Bankruptcy/discharge papers for any bankruptcies on your credit report
• Payment histories for utilities, internet, and other expenses

Income & Tax Documentation

• IRS Form 4506-T (completed, signed & dated)
• W-2s for the past two years
• Pay Stubs from past 30 days
• Federal tax returns for the past two years (1040s)
• Two most recent months’ asset and bank statements for all accounts on your application
• Written explanations for recent changes in employment or employment gaps
• Purchase contract for the property signed by all parties
• Homeowners insurance documentation, including the agent’s name and phone number.

Fill out and sign the loan documents, including fair lending notice, loan info sheet, and credit authorization.

This document contains important information regarding the loan you’re applying for, including estimated interest rates, monthly payments, and the settlement charges that you must pay at closing.

The underwriter may occasionally request additional documentation or explanation of items in your application. It is important to answer these requests promptly and as thoroughly as you can to ensure the loan process proceeds smoothly.

A home appraisal is not always required for refinancing. However, it may still be in your interest to do so. If the lender doesn’t assign a high enough value to your home, the types of mortgage products you can qualify for may be limited. An up-to-date appraisal prevents this from happening.

Make sure loan amounts, payments, rate lock and other relevant information are stated in writing, in a signed document.

The closing will probably take place in the presence of a public notary and/or the settlement agent. If you have a co-applicant, they will need to be present.

• Review the final documents and ensure they are what you have agreed to previously.
• Bring a cashier’s check to cover the closing costs and down payment.
• Sign the loan documents and show your photo ID. You may possibly need to also show your Social Security card.

The lender must provide this to you within three days of closing on your loan. Review it thoroughly and compare it to your loan estimate. Ask your mortgage broker any questions you need to to make sure you understand everything about the terms.

You’ve successfully refinanced your mortgage. You’ve either taken advantage of an opportunity to save money, or obtained a bit of financial flexibility to help you take care of your expenses.

Great Northern Mortgage is here to continue to provide support for any future questions or situations that may arise.

For your education we are happy to provide additional resources to help you understand the benefits of refinancing and other aspects of the process.

• Refinance Learn about how refinancing your mortgage can benefit you.
• Mortgage Glossary A glossary of commonly used mortgage terms
• Refinancing FAQ Commonly-asked questions from our clients regarding refinancing
• Refinancing to Consolidate Debt In-depth information about applying home equity to debt consolidation
• Refinancing to Preserve Home Equity Concerned about your home equity? Refinancing may be a solution.

See if any of the following statements apply to you:

• I want to stabilize my payments with a new fixed rate. If your existing mortgage has an adjustable rate but you need greater security from fluctuating monthly payments, converting to a fixed rate mortgage may be right for you. Learn more about Fixed Rate Mortgages.
• I want a rate that may be lower or could decrease. Changing circumstances, or a desire to sell your current home sooner than anticipated may make converting to an adjustable-rate mortgage a good idea for you. Learn more about Adjustable Rate Mortgages.
• I am a veteran. For veterans, VA Interest Rate Reduction Refinance Loans (IRRRL) can help lower your existing interest rate for your existing VA home loan, or convert from a VA adjustable-rate mortgage to a VA fixed-rate mortgage. Learn More about VA Home Loans
• I show low income. A Non-QM loan, or a non-qualified mortgage, is a type of mortgage loan that allows you to qualify based on alternative methods, instead of the traditional income verification required for most loans. Common examples include Bank Statements, using your assets as income, no income no assets loans, DSCR Investor loans, Foreign National, ITIN, Vesting Title in Entities - LLCs, Corporations, trusts, partnerships. Learn more about Non-QM Loans
• I need to close fast with no income verification. Hard Money / Bridge Loans financing for residential investment properties is a short-term, bridge loan secured by real estate and traditionally used until permanent financing is put in place. An excellent alternative to conventional bank loans, a bridge loan can be an ideal solution for time-sensitive transactions. Learn more about Specialty Loans
• I have an FHA home loan. If you already have an FHA loan, you may qualify for FHA Streamline refinancing or an FHA cash-out refinance. You can lower your monthly payments, and convert adjustable-rate mortgages into a fixed-rate mortgage. Learn More about FHA Home Loans