Dropping Mortgage Rates | California Current

Considering our economy and its current standing, it is more important than ever that you get serious if you want a chance at refinancing your home loan. Awhile back, I gave you a few tips to make sure you qualified for a home loan. With mortgage rates finally dipping below 6 percent, mortgage applications are surging. But while applications may surge, it hardly guarantees any of these people will get their money. Today, loans are harder to come by and even A-Paper Mr. and Mrs. Jones are having trouble.

Aside from strict guidelines, you’re battling against changing markets. Fannie, Freddie, Lehman Brothers, and Household-Big-Name-Bank all have their share of problems. Unfortunately, the consequences can trickle down onto you, the consumer. Here are a few tips to help you successfully refinance, despite this tough lending economy.

1. Get Ready
Organize. File. Prepare. Time is always an issue during a refinance. A few days of delay could mean changing rates, guidelines, or even bank failures. You’ll need to be detailed and organized, so there is no use in rushing. But start early, and start gathering your paperwork beforehand. As far as your credit is concerned, you want to obtain a credit report months in advance. This way you can correct mistakes and pay off debts beforehand so that it will be reported by the time you apply for a refinance.

2. Get Out There
Now that you’re armed and ready, get proactive. Ask for referrals from friends, research mortgage brokers in your area, and interview a handful of loan officers personally. These individuals and companies are going to be handling the finances of your home; you want to be able to trust them and be comfortable working with them. When you finally decide, keep the other potentials on your backburner-you never know when you might need their help.

3. Get Real
Don’t fall for any cheesy advertisements or dream rate offers. Worse of all, don’t fall for any “Yes-Men”. These individuals will guarantee you anything. “4.5%? No problem!” “No credit? No Problem!” Typically, these folks are either professional bait-and-switchers or serious time-vampires. Get real already. Find out what’s going on and demand actual results. If it’s low rates they promised, ask for it in writing. If they assured you that you can qualify, ask to see a lender approval. Often times, they might be scared to lose your business and will end up promising you the world. Give them a chance, but if time is dragging on, ask them what is really going on.

If you are interested in specifics, be sure to check out this page with even more refinancing tips. As of right now, lenders still prefer borrowers with strong credit and income, and more equity in their home. These tips won’t compensate your shortcomings, but keep them in mind and you’ll stand a better chance at successfully refinancing.