4 Essentials of a Smooth Mortgage Refinance

4 essentials of a smooth refinance

The mortgage refinance process can be a bumpy one or a smooth one. Sometimes you don't know which way the process will go until you are in the middle of it. Fortunately, there are some proactive steps you can take up front, before you apply for a refinance, to make it as smooth a process as possible. And there are things you can do during the refinance process to keep it moving smoothly.

1. Use mortgage calculators

   Before you apply, use a loan comparison calculator to decide which type of loan will give you the financial result you want. Then use a prequalification calculator to make sure you'll qualify for the refinance mortgage you want.

2. Check your credit

   Your credit history and credit score play an integral role in approval for a refinance. If you have credit problems, you may never get past the application part of the refinance process. Even if you think you have great credit, take the time to pull your free credit report before you apply for the refinance.

   Read the entire credit report line by line. If there is a red flag or an error on your credit report, it makes sense to take the time to correct the problem before you apply for the refinance. It may even save you from going through the trouble to apply and then receiving a denial. Some lenders can work with credit problems by offering different types of mortgages.

3. Gather paperwork

   Your refinance will move along much faster if you supply the loan officer with all of the information needed up front, rather than providing it in dribs and drabs. When you begin the refinance process, you'll receive a checklist of items you need to submit with the application. Since most lenders require similar documentation, you may as well have these at the ready when you first approach a mortgage lender for a consultation.

   • Last two months' pay stubs for each borrower
   • Two months of recent bank and investment statements
   • Recent mortgage statement (if a different lender)
   • Copies of last two years' tax returns
   • Copy of title insurance policy (if available)

4. Be responsive

   While steps 1 through 3 help you get off to a good start, perhaps the most critical step is to stay actively involved throughout the refinance process. The key characteristic to have when going through the process of refinancing your mortgage is to always be responsive to communications from the lender. For example, if the loan officer suddenly asks for a copy of your driver's license, be sure to get it to them as soon as possible. The more responsive you are, the faster and smoother your refinance will be.

   Responsiveness includes:

   • Being available for the appraisal appointment
   • Working with the lender's title company to set a closing date
   • Reminding your employer to send in your employment verification form

When it comes to refinancing a mortgage, there are numerous levels and various aspects of the process that have to be handled by all involved. Because of the complexity of a mortgage refinance transaction, there are also numerous issues and kinks that can slow or even stop the process along the way. Spending some time playing with the numbers in the mortgage calculators, and being proactive and responsive with your mortgage lender, goes a long way toward creating as smooth a refinance process as possible.