With the mortgage refinance rates so attractive, most homeowners are once again considering home refinancing, because lowering their monthly payments provides hard dollar savings that are hard to pass up. Home loan programs see guideline changes regularly, so we recommend that you discuss your refinancing needs and eligibility with a trusted loan officer before getting too excited.
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* Lower Loan Payments
* Fixed Home Loan Rates * Reduced Years of Interest * Fixed Rate Conversion |
The Nasdaq blog recommends learning more about the finance myths before investing time shopping online and getting involved in the refinance process.
Myth: Getting approved for a refinance loan will be as easy as getting your first home loan.
The first thing to remember is that each refinance is on a case-by-case basis. Because so many lenders have been damaged in the past few years with bad credit refinancing, the industry in general has tightened up its underwriting guidelines. In many cases your initial home loan may not have required a lot of documentation so you might be shocked by today’s requirements to refinance. While this may make things more difficult for some consumers, it’s much better for the mortgage industry. The general rule of thumb is that if you have credit issues or lack of equity in your home, you may find that you have difficulty getting approved for traditional fixed rate mortgage refinancing.
Myth: If you were approved for a loan to buy a home, you will be approved for home refinancing
Unfortunately that is not always the case. In many instances, borrowers financed their home originally when lenders had minimal requirements. Since Obama has been elected, mortgage lenders have tightened guidelines for refinance mortgage transactions. Years ago, borrowers could refinance without equity, but in today’s mortgage market, borrowers typically need equity to be approved. HUD still offers a FHA refinance option that only requires 3.5% equity, but you would be required to pay mortgage insurance monthly, so it may not be worth it.
It’s no secret that home refinancing can be an excellent way to save money, increase cash flow and get quick access to cash. With that being said, every refinance experience is not always a wise financial move so you need to know the facts before refinancing. Read the complete Nasdaq article online.
