Looking to refinance your home? Unfortunately, it’s up to lenders if you’ll be able to refinance or not.
Altius Mortgage Group enumerates crucial things that could deem you unqualified for a refinance.
Plenty of homeowners took out option ARMs and interest-only mortgages way back in the housing boom since prices had nowhere to go but up. However, when the market became stable again, plenty of those homeowners ended with little to no equity. This inflated their LTV or loan-to-value ratio and made them unqualified for traditional refinancing.
Poor Credit Rating
Creditors normally consider a credit rating of around 620 poor. Couple a poor credit rating with a high LTV rating and you’ll have difficulty in find lenders who’ll risk giving you a refinance loan in today’s unstable market.
Massive Mortgage Amount
Jumbo loans are significantly more restrictive than conforming loans and come with increased interest rates. Lenders will scrutinize your application and your background more carefully if you’re asking for a large amount for refinancing.
Lack of Assets
The underwriter could deny your refinance application right off the bat if you can’t show seasoned and adequate assets. Financial experts recommend that you save money early and regularly by putting it in savings and checking accounts, bonds, stocks, and retirement funds, among others.
This is a major factor because if you don’t find yourself below the maximum DTI or debt-to-income ratio required by lenders, you won’t be able to secure a refinance loan.
Inconsistent Job History
If you don’t show absolute proof of consistent employment, normally for the last two years prior to refinancing, lenders could deny you even if you have sufficient assets or are presently earning lots of money.
These are only some of the things that could hinder your refinance goals. Contrary to what some homeowners think, you really have to be qualified to get any kind of loan. So if some or all of the above-mentioned scenarios apply to you, resolve your issues to increase your chances of securing a refinance loan.