Sometimes, dealing with the right lender for you, be it a big bank or a community credit union, can make all the difference in your refinancing efforts.
With today?s record-low interest rates being trumpeted all over the news, many homeowners feel like they are just being taunted because refinancing feels hopelessly out of reach. However, there are options out there for refinancing, and you can optimize your chances even if your home is underwater. Before you give up on lower interest rates and lower monthly payments completely, give these strategies a try:
- Look Persistently Into All Your Options
Turned down for the much-heralded HARP program once already? Ask again. HARP and HARP 2.0 are new programs, which means that often the lenders who are supposed to be implementing them either do not understand the regulations or are reluctant to get involved. So ask again. Now that the federal refinancing program has been around a little longer, more lenders are likely to understand it ? and many have federally-imposed quotas they have to meet in terms of their participation. You could quite possibly get a different answer this time around when you ask to refinance. - Try for a Shorter Loan Term
It used to be that your options for a mortgage were a 30-year and a 15-year mortgage. Now, you may be able to get a 25-, 20- or even 10-year loan. Changing up the length could change your monthly payments and savings in such a way that your numbers look better and, as a result, you get your refinanced loan. - Make Friends and Influence People
Local lenders and credit unions reward new business. In fact, some will even ask you outright to move other assets like savings accounts or CDs to their bank in exchange for a loan. This provides them with additional evidence that you have the ability to pay them regardless of credit score or state of your equity. Some big banks are starting to do this also, with Bank of America offering ?more underwriting flexibility? to customers with at least $250,000 in assets in the bank and J.P. Morgan offering ?deposit and investment customers?slightly higher loan-to-value cutoffs thresholds?[1].
What are your tips and tricks for getting refinancing in a difficult lending environment? Is it even worth the bother in your opinion?
Thank you for reading the Bryan Ellis Investing Letter!
Your comments and questions are welcomed below.
[1] http://www.smartmoney.com/spend/real-estate/4-tips-for-refinancing-your-mortgage-1338327867041/?link=sm_newsticker
Category: Personal Finance
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