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Refinancing a loan is very much like getting a purchase loan. You should expect to provide the same personal information to the lender, such as pay stubs, banking information, etc. The broker will open a new escrow and title report order, get a new appraisal, verify income and assets, pull credit and in essence, duplicate the purchase loan procedures. Lenders will normally use the new appraised value to determine the amount of the loan they will approve. However, in a case where you are attempting to refinance during the first year of ownership in order to pull some cash out of your equity, the lenders often will use the lower of the new appraisal or the original purchase price of the home. A notable exception to the above is called a streamlined refinance, which may be used when the homeowner is simply trying to lower the monthly payment and is not taking cash out of the property. In this situation, a lender makes the logical assumption that if you can afford the higher payments, you can afford lower ones. This is a less intensive refinancing method - you normally just need a recent pay stub and credit report to qualify.
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