CURRENT MORTGAGE REFOCUSING - FEB 2008
· During the refinance boom, lenders would get back to you whenever
· Bust of the sub-prime market has eliminated a good percentage of buyers 40-50%
· Traditional buyers with good credit (>720), little debt, and equity in their primary residence are in the drivers seat.
· Lenders are climbing over each other to get your business. You can count on better service.
· You now have leverage to possibly waive fees and negotiate a lower interest rate.
· Beware of thin profit margins with the lenders that are left.
· Mediocre credit scores and not much equity can still get a refinance, but it may take more time and higher rates.
· Do your homework, talk to a least 3 lenders, compare rates and costs, look for room to negotiate.
· The lender doesn’t want you to take a good loan to a competitor.
· PROFILE OF A WANTED BUYER
o Solid Credit scores – (720- 850)
o EUITYT – At least 20% of equity or down payment on a new home
o Good Debt-to-income ratio Debt needs to be less than 42%-45% of income
o Cash reserves equal to six (6) months of living expenses. (Bank, 401K or brokerage accounts)