Home Mortgage Refinance Homework before Application
It can be a wise decision to do a little homework before you apply for your new home mortgage refinance loan for two major reasons. First, you want to know if you can qualify for the new home mortgage under current lender underwriting guidelines. Secondly, you want to get a good grasp on the reasonable fair market value of your home for qualification purposes. The homework shouldn’t take too long, and your home mortgage refinance process should go much smoother.
As far as qualifications go, you want to decide who will be on the new home mortgage and what all borrowers credit scores are. Basically, in today’s market, home mortgage lenders will not approve a loan for borrowers with credit scores that are below a mid 620 fico. Secondly, you will want to figure your monthly gross income to have on hand for your home mortgage lender to calculate your debt-to-income (DTI) ratio. That way, you have all the figures and can quickly determine if you will qualify for a new home mortgage refinance. If you are a W2 wage earner, than use your current monthly gross income before payroll deductions. If you are self-employed, use an average of your prior two years of income reported on your tax return after all tax deductions.
As far as home value, there are a number of free online home value estimator websites that can give you a decent idea of the current fair market value of your home. You can go even further by researching county records for recent sales of similar homes in your area to really zero-in on your current home value. Doing a bit of homework, can make home loans a much better experience for the borrower.
