What You Need To Know About Refinancing A Mortgage
There are some very important factors to consider when you are thinking about refinancing a mortgage. The current housing market has changed the entire landscape when it comes to any type of mortgage transaction. This new landscape is especially true when dealing with any type of refinance consideration. That is why it is vital to understand some of the new restrictions and guidelines lenders are placing on borrowers.
The housing crash of 2007 changed the entire way in which finance companies approve a prospective application. Requirements have become so tight that many who are looking to simply lower their interest rate through a standard refinance transaction are unable to do so. Many prospective applicants do not have enough equity in their home to qualify, or their debt to income ratio is running well above the maximum requirement of thirty eight percent. The minimum credit score of 580 is difficult to achieve because of the continued downturn in the economy and possible sustained unemployment. However, there is a ray of hope if one is looking at refinancing a mortgage.
The first place to begin your search is to seek out banks that offer programs backed by the Federal Housing Administration. Here you will find a wide range of packages that are tailored to those who fall short of the above mentioned criteria. Keep in mind that the FHA is not the lender; they merely provide government backed insurance in case of default. This is the first step when looking for a mortgage refinance.
Review your credit report. This simple process cannot be overemphasized. Find transactions that can be disputed with one of the three major reporting agencies. This simple task can boost your score by as much as 50 to 75 basis points. Remember that all lending institutions place the most weight on three areas: credit score, mortgage payment history and debt to income ratio.
Find an independent appraiser and find out the true value of your home. Make sure he or she is certified by the state in which the home is located. An independent appraisal outside of the bank's appraisal can give you bargaining power when trying to negotiate the true amount of equity in your home. You will be surprised at how flexible banks can be with an independent appraisal.
Times have changes when it comes to refinancing a mortgage. It is not easy to obtain qualification due to the strict guidelines lenders have placed on borrowers. Use the power of the FHA, and follow the simple tips listed above and you may find exactly what you are looking for.
The housing crash of 2007 changed the entire way in which finance companies approve a prospective application. Requirements have become so tight that many who are looking to simply lower their interest rate through a standard refinance transaction are unable to do so. Many prospective applicants do not have enough equity in their home to qualify, or their debt to income ratio is running well above the maximum requirement of thirty eight percent. The minimum credit score of 580 is difficult to achieve because of the continued downturn in the economy and possible sustained unemployment. However, there is a ray of hope if one is looking at refinancing a mortgage.
The first place to begin your search is to seek out banks that offer programs backed by the Federal Housing Administration. Here you will find a wide range of packages that are tailored to those who fall short of the above mentioned criteria. Keep in mind that the FHA is not the lender; they merely provide government backed insurance in case of default. This is the first step when looking for a mortgage refinance.
Review your credit report. This simple process cannot be overemphasized. Find transactions that can be disputed with one of the three major reporting agencies. This simple task can boost your score by as much as 50 to 75 basis points. Remember that all lending institutions place the most weight on three areas: credit score, mortgage payment history and debt to income ratio.
Find an independent appraiser and find out the true value of your home. Make sure he or she is certified by the state in which the home is located. An independent appraisal outside of the bank's appraisal can give you bargaining power when trying to negotiate the true amount of equity in your home. You will be surprised at how flexible banks can be with an independent appraisal.
Times have changes when it comes to refinancing a mortgage. It is not easy to obtain qualification due to the strict guidelines lenders have placed on borrowers. Use the power of the FHA, and follow the simple tips listed above and you may find exactly what you are looking for.
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