Laura Houle Real Estate Services


So You Want to Refinance?

Posted on September 02, 2012 by laura

For some people it’s virtually an impossibility to refinance their home, despite an optimum FICO score and an absolute lack of negatives on their credit report for a substantial amount of time.. No late payments. no bankruptcies, no foreclosures. Nada.

There seem to be underwriting judgments out there that are totally unreasonable, that don’t take under consideration good money management at all. In fact, they actually are judging you on your life style, as effective as it might be.

The last time I tried to refinance, after a preliminary approval, I was asked if I owned any timeshares. Well yes, I do.  I then was asked what my assessments were. Bear in mind that these show up nowhere. The vacation ownerships that we own are absolutely free and clear. There are many ways to handle these travel weeks and I am quite proud of my ability in this respect.  I told the bank that this would be a killer if they were to add these to our expenses. After all, if you book a trip and pay $10,000, it shows nowhere. So why should it matter if you use another system that allows you to travel even more? Well, you guessed it. They added it to the debt and the  loan was denied.

Other harmful items are how you pay for things. I rarely use cash because I love points. These points play right into my travel plans. As a result I charge everything, even every day expenses, that normally would not show up anywhere.  I pay all my charge card bills monthly. Nothing is carried over so there are no interest charges. However, if you have high balances during  your qualification period, the underwriter adds that in too, to your overall debt, permanently. Never mind that the bill is paid monthly and automatically too! There really should be a revamping of underwriter’s guidelines and a little bit of common sense wouldn’t hurt either.  How about stellar credit over many years? Where’s the risk? I actually have paid extra principal monthly on the loan that I’m trying to refinance. Why not look at that history in conjunction with everything else? Why this cookie cutter mentality?

Hey, I tried to apply for loan modification with my bank, but they said there was no hardship and the modification was denied. I then attempted to refinance with this same bank, the one who currently holds my loan and they said my debt to income was too high. Never mind that I could save $800 to $1000 per month! They just want me to keep paying this exorbitant payment! Now, if I didn’t make my payments, maybe I could get a loan.

The HARP loan? Well, I could do that except that my loan is not owned by Fannie Mae or Freddie Mac so it doesn’t qualify. I’m sure there are many others in this situation.

I thought that I had finally found a bank that qualified me. It was ultimately denied because the owner occupancy at my condo project was at 57%. For other lenders, this is perfectly acceptable, as it is a principal residence and has been for over five years.

Again,  good FICO score, excellent  credit, etc. What’s wrong with this picture?

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  • Laura Houle is a Realtor since 1970 (DRE #00363325), a Mortgage Broker since 1987 (NMLS #337875), and a Certified Paralegal.

    A graduate of USD, Laura was the East San Diego County Association Of Realtors Realtor of the Year in 1997, and Association President in 1996 & 1998.

    laura@laurahoule.com
    619-447-3502
    619-489-3657 (fax)

    Laura Houle Real Estate Services
    555 Front St. #602
    San Diego, CA 92101

     

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