Refinancing Your Mortgage: What to Know Before You Start 

Some homeowners are surprised to learn that refinancing means applying for a brand-new mortgage loan. And yes, that can bring back memories of paperwork you’d probably rather forget. 

You might be wondering: If I already have a mortgage, why do I need to qualify again? The answer is simple — a lot can change over time. Your income, credit, debts, and even your home’s value may look different today than when you first purchased your home. 

If you’re thinking about refinancing, a little preparation can go a long way. Use this checklist to help make the process as smooth as possible. 

Budget and Goals

  • Be clear about why you want to refinance. What are you hoping to achieve, and how does it fit into your bigger financial picture? A lower rate and payment? Cash out? Or perhaps you need to remove an existing borrower? 
  • Understand the potential drawbacks. Will the benefits outweigh the time, effort, and costs involved?  
  • Use a tool like our budget worksheet to review your income and expenses from the past month. How much do you have left over?  
  • If your refinance could increase your monthly payment, determine how much more you can comfortably afford.  

Mortgage and Title

  • Review your most recent mortgage statement:  
    • Confirm your payment history is accurate. If something looks off, contact your servicer right away.  
    • Note your outstanding principal balance (the amount you still owe).  
    • Check your current interest rate so you can compare it with new offers.  
  • Stay current on all mortgage payments:  
    • Loans in delinquency or default cannot be refinanced.  
    • Continue making payments on your primary mortgage (and any second mortgage) as agreed.  

Credit History and Debts

  • Request your free credit report at www.annualcreditreport.com:  
    • Review it carefully and dispute any errors.  
    • If you see collections, judgments, or late payments, ask your lender what steps (if any) are needed before refinancing.  
  • Maintain strong credit to help secure a better interest rate:  
    • Take on only debt you’re prepared to repay.  
    • Make payments on time and keep accounts current.  
    • Keep credit card balances at a manageable level.  
    • Avoid unnecessary new credit or inquiries.  
  • Gather documentation for any legal obligations (such as child support or restitution).  
  • If applicable, have bankruptcy discharge papers ready.  

Income Verification

Ask your lender what documentation they’ll need to verify your income. This may include: 

  • Pay stubs from the past 30 days  
  • W-2s and 1099s from the past two years 
  • Federal tax returns from the past two years  
  • Social Security and Pension Award Letters 
  • If self-employed: business tax returns, a year-to-date profit and loss statement, and a list of business debts  

Asset Verification

  • Collect statements for all checking, savings, and investment accounts from the past three months:  
    • Include every page, even blank ones.  
  • Be prepared to explain any large deposits or withdrawals:  
    • Your lender may ask for a written explanation.  

Refinancing doesn’t have to feel overwhelming. With a little preparation, you can move through the process with more confidence and fewer surprises. 

Our refinance team is here to help make things simple. Call 800-526-7145, option 6, or email refi@homeloanserv.com to learn more about your options, and how refinancing may support your financial goals.