Property Ireland

Guest Post by Peter Thompson

My company, Professional Mortgage Partners, is one of the largest and most respected mortgage bankers in the Chicago area. We work with over 70 correspondent lenders so we have access to the most programs and best mortgage pricing. We offer a wide variety of loan programs including below market rate First Time Home Buyers Loan programs. We process, underwrite and fund the loans ourselves. Our fees are low, our interest rates are always competitive and the service will knock your socks off.

With the economy slowing, more and more consumers are feeling the squeeze. In times like these it is crucial to find ways to save money and get your finances in order. One of the biggest ways for home owners to save money is through a mortgage refinance. A Chicago Mortgage Refinance can save money in several ways. You can benefit by lowering your interest rate, switching from an adjustable rate into a fixed rate mortgage and consolidate your debts. By restructuring credit cards and installment loans and putting them in to a new mortgage, you may be able to improve your cash flow and save hundreds of dollars each month. This can be a great money saving move, but with changes in the market it is more  difficult to do now than at any time in recent years.

Refinancing is still the best option for many home owners, but these are some obstacles you need to be aware of:

Tightened credit standards. Conventional mortgages require higher credit scores now than they did just a year ago. In order to get the best rate, your credit score will need to be above 750.

Income has to be verified. Over the last several years, many people bought their homes without verifying their income. Those buyers who can’t prove that they make enough to qualify for a loan now have few options.

Tighter underwriting standards. It is harder to qualify for a conventional mortgage now for a number of reasons. More home equity is required and the debt to income ratios are not as lenient as they used to be.

Mortgage subordinations are harder to get. If you have a home equity loan or second mortgage, you will need to get the lender to agree to subordinate this to the new first mortgage. This used to be nearly automatic. Now, many second mortgage holders will not allow any change, even if it might help in the long run.

Appraisals are a problem. This is probably the biggest reason that refinancing is harder than in the past. With property values down across the country, many homes are worth less than the balance of their mortgage. This is especially true for home owners who bought with low down payments over the last few years, but even owners who have been in their homes for longer are affected.

This combination of factors means that many homeowners who would benefit the most from a mortgage refinance, will not be able to refinance. There are still some options like FHA which will allow for more people to qualify, but even if the interest rates drop, many people will be stuck in their current mortgages.