The refinancing process is similar to that of taking on a brand new loan. When you apply for refinancing, you’ll need to provide certain just as you did when you applied for your current loan. Some of the information will need to be supported by the relevant documents. Lenders ask for these details for two reasons. The first is to determine if you qualify for refinancing. The second is to make sure that the loan is being made out to the correct person.
Keep this information and documents ready to speed up your refinance application approval:
Lenders ask to see income proof to make sure that you will be able to afford the monthly repayments.
You’ll need to submit these documents as income proof:
Your income information is a key factor in determining what refinancing options are available to you. A steady or upward trend in your income will have a positive impact on your refinance application. If your records demonstrate a downward trend in income, this could limit the options available to you.
All lenders will definitely want to assess your credit reports and credit score to determine eligibility. They also use this information to set your interest rate. They will initially do a soft credit pull to preview your credit information without hurting your score. However, they will do a hard credit pull to set the interest rates and other refinancing terms.
Having sufficient assets makes you less likely to default on your loan. Having assets indicates to lenders that you have additional resources to cover the repayments regardless of your income. Statement of assets generally include:
Debt-to-income ratio is another factor that impacts on refinance application approval. When reviewing your credit report, lenders will assess your income and current debts to calculate your debt-to-income ratio. Besides checking your debts on your credit report, lenders may also ask for documentation related to:
The above is standard information that all lenders will ask for when you apply for refinancing. Some lenders may also ask for additional information for refinance application approval. Make sure to ask and keep all the necessary information and documentation ready to prevent any delays in processing your application.
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