Preparing for Refinancing (Equity Loan or HELOC)

An interest rate for a 30-Year Fixed Rate mortgage was at a low 3% in January. Back then, homeowners were able to refinance at lower rates regardless of lenders or programs. Unfortunately, these low rates are no longer available. If you are considering a refinance, I recommend preparing yourself ahead of time by reviewing the following topics.

Income:

All lenders want to make sure that you have capacity to pay off an Equity Loan or HELOC even if you already purchased and owned a home. They will check to make sure the stability of your income with supporting documents. It will help if you have the same employment or a different employer with the same line of work in the past 2 years.

Credit Histories:

The most of lenders if not all, will run and check your credit before providing you any loans. Lenders are not only checking your FICO scores but also credit histories including late payments, collection or chargeoff accounts, foreclosures, and bankruptcies. Lenders want to make sure you are responsible and reliable person who make payments on time. Your past payment histories are good indicators for your future performance so they will review them closely. You want to make sure there are no derogatory credit histories. But if you do, you want to make sure you have good justifi cation for them.

Liabilities:

In addition to your credit histories, lenders look at your Debt-to-Income (DTI) Ratio closely. A DTI Ratio compares your monthly debt and income. A lower DTI ratio means that a smaller portion of your income is used to pay monthly debts, so lenders regard your loan favorably. Ideally, you have no debts other than mortgage related debts. But if you do, I recommend consulting with a loan offi cer who can evaluate your debts and advise you an effective way to pay down or pay off debts if necessary.

Appraisal:

Some lenders waive appraisals but the most lenders require appraisals. An appraisal value will be used when the lender calculates a loan limit (the maximum loan amount) you can borrow based on a Loan-to-Value Ratio (LTV). A lower LTV ratio represents less risk to lenders, so you are likely to get a lower interest rate. You don’t have to keep your home shiny, but you want to repair and make sure everything in working order before appraisal.

Refinancing (Home Equity Loans or HELOCs) can be as hard as purchasing loans if you are not familiar with mortgage process. It can be confusing, frustrating, time consuming and demanding. But you don’t have to do homework all by yourself. You can eliminate some of hassle and headache by working with a trustworthy loan officer who can walk through the whole process.

住宅ローンやリバースモーゲー ジに関し詳しくは (808) 365-5900 もしくは、EmailにてShinichi. Matsumoto@myccmortgage. comまで、ご連絡ください。

Shinichi Matsumoto
Loan Officer
NMLS1852845
M 808.365.5900
E Shinichi.Matsumoto@myccmortgage.com

CrossCountry Mortgage | 3555 Harding Avenue, #100 Honolulu, HI 96816 | NMLS3029 NMLS1379257 Equal Housing Opportunity. All loans are subject to underwriting approval. Certain restrictions apply. Call for details. CrossCountry Mortgage, LLC. NMLS3029 (www.nmlsconsumeraccess.org)