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Buying or refinancing. But wait, there's more

September 1st, 2011 3:07 PM by Sam Kader

Rates are at historic low. Thinking about refinancing your mortgage?  Pay attention to these items:   

  1. Appraised Value. Consider a possibility that your house may worth less than what you think it's worth. Know how much you owe and what the Loan-to-Value (LTV) is when the appraiser arrives. Inquire with us if your LTV is greater than 80%. We may qualify you for government special programs.
  2. Obtain Conditional Approval and lock the rate (30 day lock - cushion for any financing contingency).
  3. Do not start home improvements project prior to appraisal being completed.
  4. Consider shorterning the maturity from 30 year to either 10, 15 or 20 year mortgage. Rates are still attractive. But, payments will go up.
  5. Credit score preferably at 720. Minimum requirement is 620. Check for Dispute Account which can snag the refinancing process.  Inquire about our  special program if your credit score is less than 620.
  6. Do not open a new trade line, apply for a new credit card, departmental store, auto loan or anything that will impact the credit scores and create more liabilities.  In today's strick underwriting guidelines, borrower's Debt-to-Income (DTI) ratio must no go over 50% with 45% being preferred. Do check your credit report yourself. So much is depending on the scores and the content of the credit report. Eliminate any surprises early on during the process such as unknown collections, late payments, judgement or tax lien and disputed accounts.
  7. Do your shopping for mortgage rates within the first 30 days of loan application. This will reduce the impact on the credit scores and makes it easier for us to explain on all those inquiries. Even soft inquiries need to be explained. (Concern that new debt is created). 
  8. Do not close any of your existing accounts especially those with more than 3 years credit history.  If you are unhappy with the credit vendor - wait until your financing is done, then close the account.  
  9. Do pay all your bills on time.
  10. Do not quit your job. You may change job within the same field provided that it's at least a lateral move.
  11. Self-employed - Do talk to us first before you even started. Self-employed borrowers require special attention.
  12. Do keep the funds in the bank untouched until after closing.
  13. Do not make any large deposits (defined as more than 25% of the total monthly qualifying income for the loan) other than payroll checks without paper trail. By that I mean, I need to see a copy of the check and where does it come from.
Posted in:General
Posted by Sam Kader on September 1st, 2011 3:07 PM

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