Solutions to Common Colorado Refi Obstacles

Are you exploring your refinancing options in Colorado? Do you have a unique circumstance that makes you wonder whether it's even possible? In this article, we share the most common refinance issues and their solutions.

Need solutions now or want to talk one-on-one? Give us a call! At Castle Rock Mortgage, we're always happy to assist and guide you with pressure-free options. 

You Have Diminished Equity

If you don't have enough equity, you won't be able to refinance. If your home's present value can't secure enough to cover the new loan, getting a new loan isn't possible.

Solution:

There is no quick fix to this problem. The only thing you can do is continue making payments on your current mortgage to gain equity. If you are underwater, a refinance through a HARP may be an option depending on your loan program.

You Recently Refinanced

If you just refinanced in the past six months, your chances of refinancing are not that high.

Solution:

The best thing to do here is to wait a longer period before applying once more to refinance in Colorado. It's also an excellent time to consider your reasons for refinancing. Remember that fees are associated with refinancing your loan, and doing it too soon won't be financially beneficial.

You Don't Occupy the Property Anymore.

Refinancing a home, you no longer live in is possible, although generally more expensive than refinancing a primary residence. This is because investment properties as seen as a higher risk. Plus, there are different governing regulations for refinancing secondary properties.

Solution:

Optimally, you'll want to refi before you move out. If that's not possible, be sure to have your income, credit, and DTI in top shape before applying. These items will be held under higher scrutiny when refinancing a loan for a secondary property.

You Haven't Kept Up to Date on Your Current Mortgage.

Lenders approve loans when they see that you are a reliable borrower. If you haven't been faithful with your mortgage payments, you'll be considered a more considerable risk.

Solution:

Generally speaking, foreclosure proceedings begin after you've missed four consecutive mortgage payments, although it differs from lender to lender. The first step is to resolve your loan payment delinquencies before applying for a refinance. Talk to your current lender to see what programs they have in place to help you with this. Once you're in good standing with your current lender, you're in a prime position to apply for refinancing and get approved.  

Your Credit Score Is Struggling

Low credit scores are a red flag for lenders, so the chances are that you won't get approved for a refinance --at least not at a favorable interest rate.

Solution:

Work on increasing your credit to improve your chances of getting approved for a refinance. Start by requesting a free report and correcting errors if necessary. Then start chipping away at reducing your debt with on-time payments. Another benefit of improving your credit score is that you refi other loans to get a lower rate!

Ask about a refinance with Castle Rock Mortgage to see if you can qualify.

 


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.