Many homeowners stretch the truth to qualify for a better mortgage rate when refinancing. Everyone fibs a little, right? How's the mortgage lender going to find out? Here are several tips about income verification to help you avoid pitfalls and qualify for a better rate when mortgage refinancing.
Mortgage lenders verify income and assets prior to approving your mortgage application. They may also require proof of your separation agreement or divorce, where your money comes from, your bank and investment account balances, and nearly any other fact you are claming material to your refinancing application.
Lenders Verify Income When Mortgage Refinancing
Your lender may call or write to your employer, request your pay stubs, ask for your tax returns, and even request permission to contact the IRS directly regarding your income. If your mortgage company asks you to complete an IRS form 1406 giving them permission to contact the IRS on your behalf, make sure you specify the years you want the lender to see. If you forget to mark this on the form you might have some nosy underwriter rooting through your complete history of tax returns. Your lender will verify the income you complain with your documentation for accuracy. If the lender finds discrepancies it could delay approval or raise your interest rate. This is why you never want to intentionally or otherwise submit erroneous information with your mortgage refinancing application.
Lenders Also Verify Debts When Mortgage Refinancing
To verify your debts the mortgage lender will obtain credit reports from all three credit reporting agencies. The mortgage lender may also ask for your most recent bank account statements and run a check of public record for outstanding liens or judgments against you. Make sure the figures on your application for mortgage refinancing are an accurate representation of your overall debts. Again, downplaying your debts could lead to qualifying for a higher mortgage rate or even having your mortgage refinancing application denied.
The majority of mortgage lenders carefully scrutinize an application for numerical discrepancies, missing information, gaps in dates, and anything else that seems fishy. Don't play games with your mortgage lender, report all your debts and income honestly and you stand a much better chance of qualifying for a better mortgage rate that saves you thousands of dollars.
You can learn more strategies for mortgage refinancing while avoiding costly homeowner mistakes by registering for a free mortgage tutorial.
To get your FREE six-part Mortgage Refinancing Video Tutorial, visit RefiAdvisor.com using the link below.
Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. For a free copy of "refiadvisor.com Mortgage Refinancing - What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.
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