The Best Refinance Rates - Qualifying For Them Is Easier Then Most Borrowers Think
Every homeowner that refinances their home wants the best refinance rates that they qualify for.
But many home owners are not exactly sure how to go about qualifying for those rates.
Instead of being at the mercy of your mortgage broker you should educate yourself on how to get the best refinance rates.
The common myth about mortgage interest rates is that you need perfect credit to qualify for them.
Nothing could be further from the truth, conforming mortgages today are mostly approved through the Fannie Mae automated underwriting system called Desktop Underwriter or DU as it is referred to in the industry.
Loans run through DU are analyzed for a variety of factors and credit score is not the most important one.
The program will look at the loan to value of the property you are refinancing.
The program also analyzes your debt to income ratios and amount of liquid assets you have available.
Generally if debt to income ratios and loan to value are low you can qualify for the best refinance rates with a credit score as low as 620, this is a far from perfect credit score.
If your credit score is under 620 you may find it difficult to qualify for the best refinance rates with a standard conforming loan.
The only option you will have is the FHA loan.
FHA will loan up to 97% of the value of your home and has interest rates that are very close to conforming loans.
FHA looks at overall borrower profile as well but will take borrowers with credit scores as low as 500 and in some cases under 500.
The main drawback to an FHA loan is the funding fee of 1.
5% of the loan amount.
Although when compared to a high interest sub prime loan the FHA loan is a hands down winner even with the funding fee.
Qualifying for the best refinance rates is not as difficult as most people think, you just need the right information and the right mortgage broker.
Seeking a experienced mortgage broker that offers conforming and FHA loans will give you the best chance for a low interest rate refinance.
But many home owners are not exactly sure how to go about qualifying for those rates.
Instead of being at the mercy of your mortgage broker you should educate yourself on how to get the best refinance rates.
The common myth about mortgage interest rates is that you need perfect credit to qualify for them.
Nothing could be further from the truth, conforming mortgages today are mostly approved through the Fannie Mae automated underwriting system called Desktop Underwriter or DU as it is referred to in the industry.
Loans run through DU are analyzed for a variety of factors and credit score is not the most important one.
The program will look at the loan to value of the property you are refinancing.
The program also analyzes your debt to income ratios and amount of liquid assets you have available.
Generally if debt to income ratios and loan to value are low you can qualify for the best refinance rates with a credit score as low as 620, this is a far from perfect credit score.
If your credit score is under 620 you may find it difficult to qualify for the best refinance rates with a standard conforming loan.
The only option you will have is the FHA loan.
FHA will loan up to 97% of the value of your home and has interest rates that are very close to conforming loans.
FHA looks at overall borrower profile as well but will take borrowers with credit scores as low as 500 and in some cases under 500.
The main drawback to an FHA loan is the funding fee of 1.
5% of the loan amount.
Although when compared to a high interest sub prime loan the FHA loan is a hands down winner even with the funding fee.
Qualifying for the best refinance rates is not as difficult as most people think, you just need the right information and the right mortgage broker.
Seeking a experienced mortgage broker that offers conforming and FHA loans will give you the best chance for a low interest rate refinance.
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