Thursday, January 1, 2009

When Is It Time To Refinance? – Common Obstacles In Today’s Lending Environment (Part 6 of 6)

It is hard for me to believe the percentage of people who have inquired about a home loan with me I have had to tell I couldn’t help due to one reason or another. In 25 years in this business, I’ve never seen so many! Here are some of the most common reasons for the people I’ve talked with:

  • Estimated Market Value determined by an appraisal is insufficient to support the loan amount you wanted to borrow.
  • Need Stated Income program due to self-employment, but these programs are no longer available.
  • Declining Market Value Area determination restricts your loan amount by 5%
  • Wanting to know you are getting the lowest interest rate, timing the “bottom” of the market, but missing it by procrastinating or gambling on waiting and having low distress sales further decrease your property’s value.
  • You haven’t been monitoring your credit, and an error was discovered when you applied for your loan and/or creditor(s) lowered your credit limit sinking your credit score due to the ratio of amount owed vs. the account limit.
  • Your revolving/installment debt balances increase and/or your income has declined, so now you don’t meet the tighter debt-to-income ratio criteria many programs have.
  • You fall in to the "Jumbo Loan" category, a market that has been turned upside down due to the exit of the investors who provided the funding for these loans, and the available interest rates are too high.

Now more than ever we need to remain proactive with monitoring our credit, limiting our credit usage, budgeting, and investigating as best we can the financial companies we are looking to do business with.

See you at the closing table!
Karen Cooper – OR/CA Mortgage Consultant –

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