First learn what's refinancing means? Refinancing is basically replacing one debt with another debt obligation under better terms.With interest rates going low, many individuals think of going for buying a home, vehicle, investments or refinancing a mortgage. But it is always the worry of the consumer on whether his loan or refinance will get accepted, with the lending standards now increasing day by day. So what factors are needed to qualify for a refinance?
Before applying for a refinance, make sure that your corporate credit health is in good financial situation. If you don’t have enough financial strength to refinance, then going through the application process is a waste of time. Different credit institutions have different criteria to qualify for a refinance, but following are the general factors needed to qualify:
Value of the equity:
Lenders mostly require consumers to have equity in their homes, other properties etc. The home-owners value of the property should be more than what he needs for the refinancing of his loan.
Credit score:
The mortgage lenders would take in account your credit score, making note if your mortgage payments have been on time. Your credit score shows the credit worthiness of an individual helping the lender make a decision about whether to accept your application.
Debt-to-income ratio(DTI):
DTI is the total debts to be paid as a percentage of the gross income. The lenders take into account your DTI ratio and a low DTI ratio is needed to qualify for a refinance. If you debts form a large part of your income, the lender sees you as a risk as you may not be able to pay back the refinance loan.
The other factors which are seen while evaluating your application is your income, savings and there also may be some additional factors for some other banks.
Get in with us for detailed guidance @ www.cibilconsultants.com
Source: Secondary
Before applying for a refinance, make sure that your corporate credit health is in good financial situation. If you don’t have enough financial strength to refinance, then going through the application process is a waste of time. Different credit institutions have different criteria to qualify for a refinance, but following are the general factors needed to qualify:
Value of the equity:
Lenders mostly require consumers to have equity in their homes, other properties etc. The home-owners value of the property should be more than what he needs for the refinancing of his loan.
Credit score:
The mortgage lenders would take in account your credit score, making note if your mortgage payments have been on time. Your credit score shows the credit worthiness of an individual helping the lender make a decision about whether to accept your application.
Debt-to-income ratio(DTI):
DTI is the total debts to be paid as a percentage of the gross income. The lenders take into account your DTI ratio and a low DTI ratio is needed to qualify for a refinance. If you debts form a large part of your income, the lender sees you as a risk as you may not be able to pay back the refinance loan.
The other factors which are seen while evaluating your application is your income, savings and there also may be some additional factors for some other banks.
Get in with us for detailed guidance @ www.cibilconsultants.com
Source: Secondary
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