If you want to apply for a bad credit mortgage refinance, but the paper work is intimidating, this article should help. We’ll talk about the types of information you need to gather in advance, how to use the information and a few tips and tricks to make the whole process easier. After reading this article you should be able to sit down and get that refinance mortgage with bad credit application completed.

Step 1: Gather the Documents
You will need to gather quite a bit of information, but once the information is all together it will make the rest of the process much easier. Gather this information for each person who will be listed on the loan paperwork.
A.    Employment Records

1. W2’s
2. Your most recent paystubs for the past 2 months
3. Employment history for your last 3 positions, including dates, addresses and phone numbers and salary information

B.    Tax & Bank Documents

1. Past 2 years tax documents
2. Past years bank statements (some lenders require more)

C.    Credit Card and Loan Documents

1. Recent Mortgage statements
2. Most recent credit card statements listing how much you owe and monthly payment
3. Most recent car loan statement listing how much you owe and monthly payment
4. Any other loan or debt information – what will be needed is total current balance and the monthly payment amount

D.    Asset Information

1. Statements of any stock, investment, IRA, 401k accounts
2. Valuation of any cars, boats or other major assets you own
3. Bank statements of any other investment accounts
4. Property tax documents for the home you are refinancing
5. Title information on the home you are refinancing

E.    Personal Information

1. Residence history for the past 7 years
2. Social security number

Step 2: Fill Out the Application
Using the information you gathered, fill out each line of the application using the relevant information.  If it asks you for the type of mortgage loan and terms, leave that section blank as you do not know yet which loan you will accept. The more complete you can be on your bad credit mortgage refinance loan application, the better the chances of having it approved right away without delay.

1. Property Information Section
   Since this is a refinance, fill in your current property information. You will likely be asked how the title is currently held, how you would like the title to be held on the new loan, and the current value of the property. You can leave current value blank if you do not yet have an appraisal.
2. Borrower Information
   Here you want to list all of your personal information – name, SSN, residence history, etc. Be as complete as possible, missing information can cause delays.
3. Employment Information
   Fill in complete information on current and previous employers. Check with your employer on how they like to handle income and employment verification requests and be sure to list the correct information on how the lender can contact your employer.
4. Income and Expense Information
   Use your paystubs to fill in the information on income.
5. Assets and Liabilities
   Take a look at your credit card and loan statements to fill out the liabilities section. Use the asset information you gathered to fill out the asset section.
6. Signatures
   Depending on the form, you may need to sign the document in multiple locations.

Tips & Tricks

• If you get stuck at any point, ask for help from your bad credit mortgage lender or broker. They are familiar with the forms they use and can help explain exactly what the form is asking for.
• Try to think of all your sources of income. Do you have a small part-time business where you earn an extra $100/month? Don’t forget to list it. Pensions, annuities and other regular sources of income can really help with the income portion of the application.
• If you have a long history in the same field, ask the lender how they would like you to list it. Let’s say you’ve been an electrical engineer for 25 years but recently have switched jobs 3 times in the last 5 years, letting them know your long history can help.
• Personal Letter –I have found that it can help to write a personal letter explaining your situation, why you are applying for the loan and how the loan will help you and your family. If you can provide character references (not family members) who the lender can contact, that can be a help too. This letter can help the lender put a face on your application and become more vested in helping you get your loan approved.
• Keep a copy of your application and use it for future loan applications. Next time all you will need to do is update a few areas and it will make the whole process much faster.

Conclusion

Filling out a mortgage application isn’t hard, it’s just time consuming. The tips and tricks above should help you have success in your application. Remember to talk with your lender if you have any questions. With the information provided above, you should be able to gather the necessary documents quickly and get your application filled out so you can qualify for a great bad credit home mortgage refinance.

photo credit: Casey Serin