The Most Common Mortgage Refinance Problems | RealtyPin.com
NEW YORK, Jan. 23, 2013 /PRNewswire-iReach/ -- Solving the Most Common Refinance Problems - When you're searching for a mortgage through Realtypin.com's Mortgage Center, you'll be able to find a ton of refinancing options. But what happens if you find a deal you like with a lender you like – and then run into some problems later on? Don't worry! Lots of people run into some kind of refinance problem, so you're certainly not alone. Here's what you can do to fix things and get back on your way to success:
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- Reduce your principal
This is what many people have to do if they are buying homes for sale without a down payment – a common practice in the early and mid-2000's. Because they didn't put anything down, they don't have enough equity in their homes to qualify for a refinance now. So, if you're one of these people, how do you reduce your principal? You can do one of two things – reduce it all at once, or reduce it over time. If you reduce your principal all at once, you'll have to come up with money for a lump sum payment. So, think carefully. Do you have any assets you can sell – like a piece of property somewhere else? Are you getting a big work bonus anytime soon? What about that inheritance you just got? If you can't afford to reduce your principal all at once, you'll have to do it in chunks – like paying a few extra hundred dollars a month. But until you can get your principal to an amount that your lender is satisfied with, you won't be able to refinance.
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- Improve your credit score
Odds are lenders weren't looking at credit scores as closely when you qualified for your mortgage as they are today. So, you may have qualified without any problems – but your score isn't good enough to earn you a refinance today. Unfortunately, the only thing you may be able to do is put your refinance on hold while you work on improving your credit. But before you "take the long road", be sure to get a copy of your credit report. Even a few minor errors could be dragging your score down low enough to prevent you from qualifying for your refinance. Getting them corrected won't take long, and then you can move forward with your new loan.
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Solving the Most Common Refinance Problems
- Pay off other loans
If you can't qualify for a loan because you don't earn enough, the solution isn't to get a higher-paying job. After all, that's a lot easier said than done! (Plus, any new income needs to come in continuously for two years before it counts towards a home loan, so that wouldn't be a quick fix anyways.) Instead, you can "increase" your income by paying off other debts – like your car loan, your student loans, and your credit card debts. Then, in the eyes of your home lender, you'll have more money available to spend on your mortgage.
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