In the mortgage industry they have made the guidelines for low mortgage rate refinance much tougher than they were in the past. You now need to have a much higher credit score. Unless you have a 620 FICO score you will not be able to get any type of financing on your home. Also to do a low mortgage rate refinance you will need to show some equity in your house. This equity usually needs to be around 20% of the homes value. The amount of equity is based upon the type and area of property that you are looking to do a low mortgage rate refinance on.
Essentially to many of the banks are struggling with the loans that they have issued in the past. Many of those homeowners have defaulted on their loans and left the banks holding the properties. This is why now the banks are being much more careful of who they offer a low mortgage rate refinance to because they don’t want to be stuck with more foreclosed properties on their books.
How strict the low mortgage rate refinance guideline are is all based on how risky the homeowner is. The more risky that the homeowner is, the harder it will be for them to be approved for low mortgage refinance mortgages. Also the riskier that the business is the less competitive of low mortgage refinance rates will be assigned to the borrower. Essentially the riskier the borrower the harder it will be for them to be approved and the more expensive it will be for them borrow the money. There are also differenct guidelines between first and second mortgage refinancing.
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