Are Remortgages Possible In This Economy

Remortgages are nothing more than loans that redistribute your original mortgage loan. They include refinancing loans, modification loans, and even lines of credit varied and fixed.

Of course, even though they still exist, they are hard to come by. Whereas only a few years ago, before the collapse of the real estate and financial industries world wide, virtually anyone who had a job and decent credit could be rewarded with a pretty decent APR on a mortgage or refinancing.

Credit scores have always been important when it comes to what kind of APR you might get, whether it’s for a loan or even a credit card. Not long ago a credit score in the mid 600s would almost guarantee you a great APR – which is one reason the banking industry is in the situation it finds itself now. Too many people were getting loans – people who never should have been approved. Those days are gone.

At least for now, and presumably for the short term at least. Banks have found a need to severely reduce their risk in the lending market, and in terms of providing loans, they are nervous about making loans without the backing of Freddie and Fannie. What does this mean to folks looking for remortgages? It means they are probably out of luck!

Banks have curtailed all their lending, including to home owners or first time buyers, no matter what their credit rating might be. People with scores of 800 are being turned away because of lack of liquidity and other reasons we never heard of just a few years ago.

Today, banks want to see investment accounts and cash assets that can be used in case income is reduced after the loan is approved. No longer just interested in income to cover and pay for the loan, banks now demand that borrowers have plenty of cash on hand to get through troubled times.

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