There has been a lot of press about the mortgage situation and the ability of “regular” people being able to refinance. The Dallas refinance outlook is much the same as throughout the country with a few additional considerations. If you happen to be in the Dallas area, you haven’t been hit as hard with the mortgage crisis as many other cities in the US. This doesn’t mean it’s any less difficult for you to go through the refinance process. You’ll still be considered for a refinance mortgage based on the usual criteria, such as your credit score, income, value of the property and the amount of the loan.
Refinance mortgage options can be categorized as a traditional refinance and a streamlined refinance. Either of these options can be explained to you more in depth and also specific to your exact situation by working with a qualified loan officer in your area. The traditional refinance will be a lot more in depth and take more into consideration than the streamlined refinance. What this means is that it may be more difficult to qualify for a traditional refinance, especially depending on the value of your home compared to the loan amount you’ll be applying for. The same things a lender would consider if you were purchasing a home for the first time or even a second or third home would be considered with a traditional Dallas mortgage refinance.
A streamlined refinance is usually done with the same lender and usually an FHA lender where you have an opportunity to take the same loan situation and simply reduce your rate. This is program that is sponsored by the Federal Housing Administration and of course takes into consideration only the situation with the existing rates being lower than what you are currently paying. It doesn’t have as much flexibility to do any sort of cash-out refinance with the streamlined refinance, but will take into consideration the fact that you’re paying a higher rate than the going rate and make the adjustment to match.
The Dallas refinance market is still strong all things considered. Of course some of the factors that may influence your ability to get a refinance mortgage will be the value of the home in relation to the amount you owe on the home. You may be “upside down”, owing more than the home is worth. This makes a traditional refinance next to impossible. A streamline refinance may be an option for you, but again, check with your local loan officer or mortgage broker. If you’re working with a competent loan officer, you should be presented with a few different options and the explanation of what each of these options represent should be understood by you.
Assuming the value of your home is more than the loan amount, you’ll be past this specific barrier and then be able to work with a lender on your mortgage application which will take things like your credit score and income into consideration. The majority of the rates advertised are for what is known as “A paper” loans or the loans where the credit score is high and the income is sufficient to justify the loan amount. Lenders have been forced to crack down on the liberal lending policies they were working with a few years ago which got the US into it’s current situation with the lending crisis in the first place.
These lenders have made these adjustments and although there are still a few loan officers and lenders that may “look the other way”, the auditing process to make sure that loans are solid has also changed and the enforcement is more strict than it was previously. Do as much research on the internet as you’d like, but narrow your choices down to about 3 or 4 companies that you could work with based on the information you collect. Then do your homework by picking up the phone and contacting these lenders or loan officers and ask some basic questions to determine who you feel most confident working with.
