Do You Need Proof of Income for a Home Mortgage Refinance?
When you took out your home loan to buy your house, you got locked into those interest rates and payments for the duration of that loan. While this can work in your favor when interest rates increase, it works against you when they fall below the rate of your loan. A home mortgage refinance can help you take advantage of those lower interest rates, but applying for one essentially means applying for an entirely new mortgage. This means you’ll need to provide proof of income when you apply. These are the documents you’ll need to submit to your lender.
Current W-2 Forms
Your W-2 details the amount of money you earn each year including regular salary or wages, bonuses, and tips. You’ll need to submit your most recent W-2 form when you apply for a refinanced mortgage loan. The lender will use this information to see how much money they’re willing to lend to you in the first place. Do this for every job you have, whether it’s full-time or part-time. The more income you can prove, the more likely you are to get a better home refinance mortgage.
Last Two Tax Returns
If you can’t find your current W-2 forms or you’re self-employed and don’t have a W-2, you’ll want to submit copies of your tax returns for the last two years. Ideally, you’ll already have copies saved on your computer and can print them off. If you don’t, contact your accountant and see if you can get a copy from them. If you filed them on your own, you can always request copies of your previous returns from the IRS directly.
Profit and Loss Statements
If you own your own business, you’ll want to provide your lender with your business’s profit and loss statements for the last year. This will help the lender gain a better understanding of your total income and makes it easier for them to provide you with better loan rates.
If you have investments that generate income, retirement funds, and savings accounts, make sure you provide your lender with documents that show the values of those accounts. Remember, your total income doesn’t have to come just from your employer.
Are You Ready to Refinance?
A home refinance mortgage is a great way to lower your monthly payments and get into a loan with better rates. Once you gather these documents and can provide proof of income, apply for a loan online or contact us to discuss your options.