A lot of homeowners tend to stretch the truth when its time to qualify for a better home mortgage interest rate during a refinance. How will the lender find out? Every one does it, right? Well, here are some helpful tips about how lenders verify your income and how you can avoid costly pitfalls and refinance into a better rate when refinancing.

Almost 99.9% of the time mortgage lenders will verify your income and assets prior to approving your home mortgage refinance application. Sometimes, they will also require proof of a “Financial Hardship” such as divorce, where the money actually comes from, your bank balance and the amount of your investments, and everything else you claim on your refinance application.

All Lenders Verify Income When Refinancing a Home Mortgage.
Typically mortgage lenders will call or write your job, ask for pay check stubs, tax returns, and sometimes even ask for permission to contact the IRS regarding your income. Should your mortgage lender ask you to complete a 1406 IRS form, do so truthfully. This form will give permission to the lender to see your incomes from the years you specify. When reviewing this document the lender will compare it with your application and check for any differences in reporting between you and the IRS. This is the reason you do not want to lie to your mortgage lender or bank. Doing so will make the refinancing process harder, longer, and more costly.

Mortgage Lenders also Verify Debts and Credit Ratings when Refinancing a Mortgage.
In order to verify your credit rating the mortgage lender will generally get credit reports from each of the three big reporting agencies. A lender may also want your current bank account statements and will run a public records check and see if their any liens or judgments against you. Therefore, it is important to make sure that the application you filled out for the refinance is as accurate as possible. Downplaying the amount of debts, or income could lead to a delayed process, higher interest rates, or even your application being declined.

Most mortgage lenders will carefully verify all applications for differences and possible issues such as, missing or incomplete information, reporting of all debts and incomes in a honest way, and anything else that seems fishy. Do not bother taking chances with your lender, accurately report all debts and incomes and you will have a much better chance of being approved for a competitive mortgage refinancing which can save you thousands.

-M Petrone
www.RefinancingCondo.com

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