Getting a mortgage refinance has seldom looked more attractive than it does right now. Ads for seemingly ridiculously low teaser rates are popping up all over the place -- and even if the closing costs are hefty (many aren’t), the underlying rates make them all but irresistible.
But do you qualify? Some folks don’t realize that a refi can be just as tough as getting a new mortgage -- sometimes even tougher. One client has a stunning property, top credit, and a guaranteed income stream that was more than adequate to fund the refi. She put together all the required paperwork, scheduled an appraisal (the appraiser told her, ‘this is the finest property in the area’), and then waited a week before being told she had failed to qualify. Why? Because her place had a guesthouse -- and that particular loan program was for single dwelling properties only!
The lesson here is that it pays to ask all sorts of questions BEFORE actually applying for a specific refinance offer; in other words, kick the tires! Nevertheless, when all is said and done, locking in lower monthly payments can still be worth the trouble.
You will want to present a solid picture -- one that shows that you are financially stable with a good credit rating. Getting any kind of a mortgage is twice as hard if there are significant issues in your credit report or instability in your employment history.
Of course, the basic math has to work, too. The more income you have, the more the lender will be willing to lend. If you are married, you can opt to borrow as a couple so that your joint income is considered. Since the lender will factor in your debt load, subtract your monthly debt from your income number -- if the remainder is healthy, the lender will see that, too.
Lastly (and of key importance), your home will need to appraise for the loan you desire. Although a resurgence in property values seems firmly underway, some neighborhoods have had time to show those rising values, and some not. I can help you get an idea of how the ‘comps’ in Monrovia and surrounding areas have been faring recently – good to know when you are getting a mortgage or refinancing an existing one.
The bottom line? Getting any type of mortgage today requires all the usual suspects. Reliability and predictability are really the key here. If you are tempted by today’s record rates to try to refinance, contact a reputable lender or mortgage broker to go over your options. Rates won't stay low forever!