mortgage

FAQs about mortgage refinancing

Can I refinance again after 3 months?

Question I just refinanced about three months ago, when rates were 50 basis points higher than today. Is there any reason I can't refinance again now?
-- Seamus

Answer If anything blocks you from refinancing a 3-month-old loan, it would be the recorder's office. Back in 2003, mortgage recordings were backed up by months in many county recorders' offices, stalling refinances. As long as there's not a delay there, you should be able to refinance.

Why does my lender downgrade my credit score?

Question We have been trying to refi, but are hitting so many roadblocks. Our house just appraised at more than $1 million and our mortgage is $389,000. We do have a high debt-to-income ratio, but we have no late payments.
How much house can you afford?
Bankrate's new house calculator can help you determine how much house you can afford on your income.

We have been keeping track of our credit report, and the range is 699 to 745, with the middle score being 720. However, when the bank runs the credit report, the credit score is around 659, which was just below the 660 we needed. How can there be such a difference between what we see when we run our credit report and when they run it?
-- Lee

Answer That's weird. I'm not sure what accounts for the discrepancy. Ask the lender to show you the credit history part of the credit report. If there are any errors, ask the loan officer to get a "rapid rescore."

With your profile, even with a high debt-to-income ratio, I would think most lenders would be eager to lend to you because of the low loan-to-value ratio.

There might be issues with credit card balances near the limit. Just guessing.

Does a second mortgage complicate my refinance?

Question I got a home at $415,000 and now the value of the home is $365,000. I owe $350,000 now and would like to refinance for a lower rate. What are my options? My first loan is $300,000 and the second one is $50,000.
-- Jack

Answer This is going to be difficult to do. The second lienholder will be reluctant to resubordinate -- that is, to agree to remain in the second lien position after you refi the first lien. You could try to refi all $350,000 under HARP.

Now, things would be easier if you could throw $50,000 at that second lien and get rid of it. But if you had that kind of money, you'd be a billionaire dining at Applebee's every night. (Sorry, that's an extremely obscure reference to a "Kath & Kim" episode from 2008.)

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