Refinancing your mortgage happens to be one of those things in the realm of mortgage which has a lot of benefits attached to it. It not only allows you to apply for a new loan but also helps pay off your old loan. Moreover, mortgage refinance does come with several benefits attached to it. There are chances that when you refinance, then you might receive a lower rate on your mortgage. Not to forget the other option of cash-out refinance in case you’ve got equity on your home.
Qualifying for a mortgage refinance
Now, when it comes to getting a refinance done, then it also involves the hassle of repeating the entire mortgage loan process as well as qualifying for a refinance. If you’re wondering how you could possibly qualify for a mortgage refinance, then read on the strategies discussed below.
- Furnish your proof of income: One of the absolute necessary items that are required for you to qualify for a refinance would be your proof of income. You should have a steady source of income, be it employment, retirement, alimony or disability to actually obtain a new mortgage loan. You need to provide fax copies of your tax returns of the past 2 years.
- Lower your debt to income ratio: It’s rather important that you take steps towards lowering your debt to income ratio. This is essentially because if you happen to owe large amJounts of money, then it’s bound to impede your efforts for refinancing your home loan ultimately.
- Maintain a good credit score: Another very important requisite for getting a refinance done would be to maintain a really good credit score. A high credit score would definitely help you acquire a new loan and that too at a reasonable enough rate of interest. You should make everyday efforts like paying your bills on time and not financing any major purchase unless and until you’ve closed on the refinance loan.
- Maintain a decent loan to value ratio: The idea is to keep up a decent enough loan to value ratio and this is important for in order that you qualify for a home loan, it’s important that you don’t let your home loan exceed your home’s value. You can also schedule a home appraisal for that’ll help you determine your home’s worth. Ideally you should postpone refinancing if you happen to owe more than your property’s worth.
- Get in touch with a broker: You should make sure that you find a good broker and speak to him. You can compare mortgage products and that can be easily done by speaking to a loan broker or mortgage lender. The idea is to get pre-approved and see what you can actually qualify for with your income and credit score at present.
If you follow the 5 strategies that have been discussed above, then you’re sure to be able to qualify for a mortgage refinance. Look for the best opportunity and get your refinance done.
