According to an analysis done by NerdWallet, most American homeowners are losing $13 billion a year in total for not refinancing their homes mortgages. Their study went to show that home owners with good credit and equity can be able to save up to $215 every month just by refinancing, that is if a number of at least 5.2 million American would do that.
So the question goes, if this is the case, why is it that most American homeowners are not doing it? These are some of the reason found out from the survey.
First, people with low credit score and low income will still not be qualified for the lowest rate that could be offered them these days. Another thing that hurts it the most is the inconsistency of income that gets into a household, due to inconsistent job history. There are also those who lack assets if any at all, and this results to lack of equity for the most part.
How does one then improve on their chances to get qualified?
Try to boost your credit score, if you don't know where to begin you can check on the website of NerdWallet and get started from there.
Try to look into the FHA Loans as well, there may be something for people with bad credits. Another option would be the Federal HARP program, especially if you are short or lacking in equity.
As for most lenders, they may allow you to have a closing cost on the loan you are planning to renew, just be sure though to calculate first so you will have an idea how long it may take for you to break even on your loan.
If you can, also try to piggy back on a trusted friend or relative's credit history. Just make sure, both of you understands that you both will be responsible for the new loan and his house can serve as a collateral.
Hope this tip post can serve its purpose.
