Capacity, Credit, Cash & Collateral

When considering whether or not to refinance your current loan, remember that in essence you are purchasing the house from yourself. The loan process requires the same qualifications and process with the exception that there is no “seller.” Lenders will review Capacity, or your ability to repay a loan based on current and past income as well as your job/employment stability. It is important to have specific dates and accurate timelines related to your employment history.

Credit is another category that works as a “leading indicator” of whether or not you will make timely payments based on your past historical trends with loans, credit cards, etc. Credit score criteria has been increased as a result of the mortgage crisis which makes it important to understand your credit score standing.

Cash or total assets are another leading indicator of loan performance. The higher your percentage of equity or "Loan To Value" ratio is also a consideration. From a lending perspective, reserves or assets you have available in case unforeseen job losses or declines in income are strong compensating factors for approval.

Finally, Collateral is the home you are either buying or refinancing a loan against. Not only is the primary focus on the market value, but also the immediate neighborhood surrounding your home as it relates to marketability and current trends.

Navigating the current economic and lending environment requires experience and expertise as the market is in a constant state of flux. Let Mike’s 17+ years of experience help you make the best decision for You and Your Family.

Refinance Your Current Mortgage

Refinancing your home could save you thousands of dollars over the life of your loan. Consider how long you have currently owned your home and any potential future moves. Review how many payments you have made on your current loan to get a feel for where you on the amortization schedule. As your loan progresses over time the amount of principal paid on each payment increases, and refinancing could potentially reset the clock on this schedule. Depending on your tax bracket, it is also important to know how the mortgage interest deduction affects your income bracket when filing taxes. Another issue to consider is whether or not you would like to consolodate any personal debt or potentially remodel or update your home. Finally you should conduct a "break-even" analysis to determine if refinancing provides you a good return on your investment. As a Direct Lender we have access to the Lowest Rates and many different options for your home loan needs. For a FREE MORTGAGE ANALYSIS, email Jennifer Rader at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and indicate in the subject line "Mortgage Analysis" or APPLY TODAY!

Remodel/Renovation Loans

Is it time to update or bring your house current in design, functionality or even appliances? There are options to refinance your current loan and put an addition, renovate kitchens, bathrooms even appliances and include these expenses in your new loan. The current interest rate environment would allow you to increase your current mortgage by as much as $35,000 for either the same payment you are currently making today or as low as approximately $200 per month. (Assuming FHA Streamline"K" loan at 5.00% and APR of 6.15%) If your home is in need of a little TLC and a few changes, these programs may be the answer- even better news is that you may be eligible to take advantage of additional TAX CREDITS if the work completed includes energy efficiency. For more details or to find out what items may be eligible for the tax credits, email Jennifer at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and indicate in the subject line "Renovation Tax Credits."

Loan Modification Programs
Refinancing your home may not be an option in spite of the Home Affordability and Stability legislation recently enacted. Several circumstances could hinder your ability to qualify for financing. If your loan is not currently serviced by FNMA or FHLMC and/or you have a high loan-to-value ratio or if you have experienced a reduction in your income, you may have trouble qualifying for a new loan. If you have experienced any hardship and need assistance with loan modification there is great news for you! The Home Affordable Refinance Program for responsible homeowners Suffering from falling home prices. This current presidentially backed program took effect on the 4th of March 2009. Details of the $75 Billion Refinance and Loan Modification programs were previously released. Borrowers can directly contact their loan servicers if you are at risk for foreclosure because their incomes are not sufficient to make their mortgage payments. It also includes opportunities for borrowers who are current on their loan, but are unable to to refinance due to the decreasing value of their home. For a complete guide on "Do It Yourself" Loan Modification options, click here.