How to get going toward a successful refinancing
If you think you qualify for one of the government’s refinance programs, now’s the time to do it and take advantage of this summer’s wicked-low mortgage rates.
Here are three tips to help you get started and make it through the process.
Discover the minimum requirements to qualify.
Check our stories on how to refinance with a Federal Housing Administration loan or the Home Affordable Refinance Program.
If you need more information, go to the websites of the three government agencies — the FHA, Fannie Mae and Freddie Mac — that offer refinancing programs.
What you’ll find are the minimum lending requirements banks and mortgage companies must follow to qualify borrowers for each program.
Find a lender where you’ll qualify.
It’s important to remember that those are the minimum standards the government expects banks and mortgage companies to follow.
They’re allowed to impose stiffer requirements on applicants for federal refinancing programs, and unfortunately, many do.
(Check out our story on defensive lending to learn more about how this works.)
It’s always smart to start where you have your current mortgage. That’s where you’ve built a payment track record.
But if you can’t meet your current lender’s demands for better credit scores, higher income-to-debt ratios or more equity, just move on.
Not all mortgage providers are imposing the same, tougher standards.
Some, says David Stevens, president and CEO of the Mortgage Bankers Association, are writing loans based on the government’s minimum standards -- or very close to them.
You just need to find one.
Don’t fight the paperwork.
If you haven’t applied for a mortgage since the housing bubble of the early- to mid-2000s, you’re in for a surprise. You’re likely going to be asked to sign more stuff and provide more proof of nearly everything.
That’s not a bad thing.
It was the “anything goes” approach that got us into a mess in the first place. Be patient and keep your eye on the ball. What matters is the mortgage rate you finally get and what it costs you.
Everything else is just a nuisance -- unless it blocks your application.