Get a Good Deal When Refinancing

Documentation is one of the easiest ways to qualify for a great rate when applying to refinance a house. The more documentation a borrower can provide regarding income, assets and employment, the lower an interest rate will drop. By having the paperwork ready, a borrower can tell their mortgage consultant all the information that is needed to quote the best rate available. This includes W-2s, a year to date pay stub (or two), tax returns, divorce decrees and investment documentation. If the above documentation does not support a borrowers’ finances, then an alternative documentation loan should be the loan of choice.

A rule of thumb is that if your living expenses, including car, credit cards and your new monthly housing expenses, are not more than 50% of your income, you will most likely qualify for a conventional loan. Even if your ratio is over 50%, conventional loans can still be obtained, but the rate will be just a little higher. Also, the amount being refinanced should never exceed 80%, and should rarely exceed 70% to keep a rate low.