Do You Need A Realtor To Refinance
Do You Need A Realtor To Refinance

Do You Need A Realtor To Refinance

Do You Need A Realtor To Refinance – Mortgage refi rates remain near historic lows – some 30-year rates are below 3% and some 15-year rates are below 2.5%, as you can see here – and refinancing can last you a lifetime Tens of thousands of dollars save loans. But with so many borrowers quitting their jobs and many others facing lost income amid the pandemic, many homeowners are wondering: will I even qualify for a refinance with my current income? The good news: Income matters, but lenders consider a lot more than just your income when deciding on a refi. “The mortgage lender could reject a borrower with a lot of credit card, auto, and student loan debt while approving a borrower with no other debt, even if they earn the same salary,” says Holden Lewis, home and mortgage expert at NerdWallet, explaining that the lenders really pay attention to whether you can afford your monthly payments and not just your income. Here’s what you need to know about income and refinancing.

More important than your income alone is your debt-to-income ratio, which is made up of all your monthly debt payments divided by your gross monthly income, Lewis explains. “If your total monthly debt payments are 35% or less of your income, that’s a favorable sign,” says Lewis. And there could be even more scope: Denny Ceizyk, a senior fellow at LendingTree, says lenders typically use a maximum debt-to-income ratio of 43% of your pre-tax income to qualify you for a refinance. If you have a high credit score, you may have even more leeway: “If you have a credit score above 740, lenders can approve a refinance with a DTI ratio of up to 50%, and even higher for FHA.” — and VA loans,” says Ceizyk.

Do You Need A Realtor To Refinance

“To calculate your DTI ratio, divide your total monthly student loan, credit card, car loan, rent or mortgage, car loan, and child support payments, and the new expected mortgage payment by your gross income. If your new mortgage payment is $1,100 per month and you are currently paying $500 per month in other debt with an annual salary of $48,000, your DTI ratio is 40% ($1,100 + $500 / $4,000 = 40%). ‘ says Ceizyk.

Questions To Ask Your Mortgage Lender Before Refinancing Your Home Loan

Even if your earned income is not high enough or you are retired and have no earned income, refinancing is still possible. “Income is deemed to be the distributions from a pension account or from a trust account. As long as you can show consistent income over a period of time at a level that would satisfy insurers for the amount you want to refinance, that helps you qualify,” said Grace S. Yung, Midtown’s chief executive and wealth manager financial group. Alimony payments, disability payments, Social Security, pensions, rental income, and part-time income all count as alternative forms of income that could help you qualify for a mortgage.

If your income isn’t high enough to refinance, you need to reduce your monthly debt payments or increase your overall income. “If you currently have an FHA or VA loan, find out if you are eligible for the FHA streamline or VA interest reduction refinance loan programs, which do not require an income test,” says Ceizyk. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs offer some options to qualify with a broader income. “That means if you have a friend or relative who lives with you who has been paying rent consistently, you may be able to use their income to qualify for the refinance,” says Ceizyk.

Your credit rating, wealth, regular income, investment statements, and employment history also affect your ability to refinance. Regarding creditworthiness, Ceizyk says, “You influence the interest rate you’re offered for a refinance more than any other factor. While it’s true that you can’t even qualify for a refinance unless the lender can show you’re earning enough income to pay off the loan, it may not be worth refinancing even if you’re being offered a high interest rate as a result will have bad credit.” For this reason, he advises improving your credit as much as possible by limiting borrowing, keeping revolving credit card balances low, and paying all your bills on time

The advice, recommendations or reviews in this article are those of Picks and have not been verified or endorsed by our trading partners. Valuations give you useful information about the property and its value. You have the right to know the value of your home. Whether you are buying a home with a mortgage, refinancing your existing mortgage, or selling your home to someone other than a cash buyer, a home appraisal is a key component of the transaction. Whether you’re a buyer, owner, or seller, you want to understand how the appraisal process works and how a valuer determines a home’s value.

How To Refinance Your Mortgage

An appraisal is an unbiased professional opinion of a home’s value. Valuations are almost always used in buy and sell transactions and often used in refinancing transactions. In a buying and selling transaction, a valuation is used to determine if the contract price of the home is reasonable given the condition, location, and amenities of the home. In a refinance transaction, an appraisal assures the lender that they are not giving the borrower more money than the home is worth.

Since the appraisal primarily protects the interests of the lender, the lender will commission the appraisal. The cost of an appraisal depends on the type of property, e.g. B. Single family home, multi-family home, cooperative or condominium, they range from $450 to $700, the borrower pays this fee. Real estate appraisers must be licensed or certified — as required in all 50 states — and familiar with the area. According to federal regulations, the appraiser must be impartial and have no direct or indirect interest in the transaction. Fannie Mae requires appraisers to have experience valuing similar properties in the same geographic area.

A property’s appraised value is influenced by recent sales of similar properties and current market trends. The amenities of the home, the number of bedrooms and bathrooms, the functionality of the floor plan, and the square footage are also key factors when assessing the value of the home. The appraiser must carry out a full visual inspection of the interior and exterior and note any conditions affecting the value of the property e.g. B. Required repairs.

Typically, appraisers use Fannie Mae’s Uniform Residential Appraisal Report for single-family homes. The report asks the appraiser to describe the interior and exterior of the property, the neighborhood and similar nearby sales. The appraiser then provides an analysis and conclusions about the value of the property based on their observations. The report must include a street map showing the property being appraised and comparable sales. an exterior sketch of the building; an explanation of how the square footage was calculated; photographs of the front, back and street scene of the house; Photographs of the front of each comparable property used; and all other relevant information – e.g. B. Market sales data, public land registers and public tax records – needed by the appraiser to determine the fair market value of the property.

What Is An Appraisal?

Lenders want to make sure homeowners don’t borrow too much money on a property since the home is used as collateral for the mortgage. If the borrower defaults on the mortgage and goes into foreclosure, the lender sells the home to recover the money borrowed. The rating helps protect the bank from lending more than it can possibly recover in this worst-case scenario.

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Determine Whether To Buy Or Refinance In Seller’s Market

Senior Mortgage Editor Bill McGuire has written and edited for major newspapers, magazines and websites for more than four decades.

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