Refinancing Your Mortgage Now

Michael Lawrence   The Wealth Coach

Michael, can I really refinance my mortgage now?  I keep hearing that banks are not lending money.

     ANOTHER TIMELY, GREAT QUESTION! 

     NOW IS A GOOD TIME TO REFINANCE! I have a lot more to say about this in the future, but for right now, one of my close friends has refinanced his home twice in the last two months, and he expects to refinance again in the next 60 days!

     As with most things, ignore the naysayers that forecast gloom and doom.  Banks and other financial institutions are making mortgages left and right, and are doing so on great terms.  It is also an excellent time to buy a new or first home, as rates are at historic lows!

     You will need a few things though. 

     First, you will need to be able to prove your income.  They age of "Liar Loans," or no documentation loans, are gone.

     Second, you will need good credit.  And by good, I mean a FICO score over 660.  The higher your score, the better the terms of the loan, the less you will pay.  The difference in rates between just good and excellent credit can be up to one percentage point!

     Finally, you will need some equity in your home.  Most lenders will require at least 10% equity today. This means that the current loan or loans on your home must be no more than 90% of the total value as established by the lender.  For example, you should be able to borrow or refinance $90,000 for every $100,000 of value.  If you have even more equity, say 20% or more, you should find the lowest rate in generations!

     The money is there.  Banks are willing to lend.  They are being more selective than they had been in the past, but there are lenders looking to make loans!