Who is a good candidate for refinancing?
Nobody wants to lose their home. But, it is becoming harder and harder to pay the bills. Dropping value of home and everyday job cuts only make this situation worse. Refinancing seams like a nice way to save the “disappearing” money.
Unfortunately, it is not for everybody. Lenders are being extremely strict in our tough times. Ironically, it is more difficult to get any credit when it is most needed. So, who is a good candidate for refinancing and who should not even bother?
Credit score plays an important role. Again and again it comes to hunt or help us. The higher the number – the lower the interest rates and vice versa. Having it at 620 or lower may not be enough to have you qualified for a loan.
You need to have at least 10 and in some cases 20% equity stake in your property to refinance. This is problematic for people living in the areas where value of their homes has dropped significantly. Mortgages that are owned and held by Fannie Mae or Freddie Mac are an exception. They fall under a new program, which may allow homeowners to refinance up to 105% of the home’s value.
Magnifying glass is on your assets and income. Who is a borrower and will he be able to afford any debt obligations?
Banks do not lend to people who have lost their jobs.
What is a reason for the refinancing? Do you want to lower your interest rate? Do you want to get out of debt? Take your time and call several lenders. That will help you find the best deal. Are you in California? If so, see if Slavsky Mortgage can help.
