A subprime borrower preparing for refinance?
by Mortgage Rates on Friday, September 24th, 2010 | 8 Comments
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try http://www.amerisave.com
You probably have no equity in the property after only 2 years and with falling prices – not to mention that you probably got in on one of those low “teaser rates” resulting in you owing even more today than back when you closed, so there’s really no reason for any bank to refinance you regardless of your credit. Sorry but you asked…………………..
Yes, most of those folks cannot refinance because they didn’t bring their scores up..Yes, you should be able to get a conventional loan now, with a 620 + score …There are other determining factors,( like your debt to income ratio,etc ) so a broker with a large network of lenders would give you a greater chance of getting refinanced by shopping your deal around to many lenders…
go and search in the below site http://realestatepropertynews.com/subprime-borrower-for-refinance.html
If you continue to raise your score you should be able to refinance in a year. You are aiming for a 660 middle score. At that score you can get 100% financing if you fully document your income. Your scenario is the reason that short term financing was originally allowed. If you have value of at least what you owe you can refinance. With a credit score of 680 you can probably refinance even if you owe a little more than what the home is worth with a 125% loan. Its not perfect as you are financing more than your place is worth, but a home is a long term investment and if you bought it for a certain price it will be worth that again at some point. Markets are cyclical and we are down now, but it will eventually come back. As long as you continue to make payments on time and do the other things required to raise your scores (pay down credit card debt and keep a few lines open) you should be fine.
It depends upon so many factors.
80% of the subprime loans are performing as agreed upon. These borrowers would be welcome at any A-paper lender. In fact, where your past loan was originated has no bearing on your present loan. The real question is can you qualify today for an A-paper mortgage? If the answer is yes, then the question is does your home have enough value to allow this?
Let’s concentrate on the first question: Your credit score is very marginal for A-paper. If you’ve been late on your mortgage in the past year, forget getting the loan. If not, do you have assets that could cover two months of your mortgage payment, including escrows? Is your consumer debt plus your mortgage payment with escrows less than 38% of your monthly GROSS income? Can you document your monthly gross income with paystubs or verifiable tax returns? (That means if the lender orders the returns from the IRS they will contain the same information as those you gave the lender.) If you answered yes to these questions, you’ll get an A-paper loan. If you answered no, do what you need to do to get the answers to yes before you apply.
Assuming you qualify, the next question deals with the value of your home. Is there enough value to equal the amount of your new loan including the costs of refinancing? If the answer is no, forget it. If the answer is yes, then you will probably be able to get a new loan. If the new loan will only represent 80% or less of the appraised value of your home, you’ll have no problem. Between eighty and one hundred, you’ll have to pay PMI and, with your credit score, that can be pricey.
And despite what someone else told you, there is no such thing as an A-paper 125% loan. If you get a loan with that high an LTV, you’re back in the subprime arena. There are 103% A-paper loans, but you will not qualify on a refi.
I’ll answer!
NO!
1 – You financed 100% probably and you have no equity!
2 – Prices have fallen and not only do you not have equity, you are upside down.
3 – Even if you had equity a 620 won’t do diddly in this market, you would have to come up with cash to refinance and even then your payments would be more than they are now.
Not being mean, just a reality check!
At this point, unless you put a lot of money down, you will be hard pressed to find a lender that will do a 625 score unless you have an 80LTV and can fully document your income.
Your debt ratios also have to be under 40%.
FHA may be able to help you but you will need to payoff any collections first.
I would have some evaluate your credit to see if you can get it to 680+