Thursday, July 12, 2012

Record low rates, yet refinances fall sharply

Interest rates today have fallen yet again claiming the best rates on record, however many people in LA and around the country are finding that they do not qualify and the main reason being that they just do not have enough equity.

How much equity do you need?  At least 20% to get the good rates, and 40% if you want the screaming rate, the rate that's advertised on the radio, internet and TV.

These people that cannot qualify are earning the money and have the credit needed, yet they don't have the equity, and Fannie or Freddy do not own their loan so they do not qualify for the HARP program or any other government programs.

Therefore, they are what seems to be just left out in the cold, and not able to partake at the table of low rates and improved prosperity for their family.

So what can be done for these people who pay their bills on time, have great credit and stable jobs with income taxes to prove it?

Currently not much, unless they want to take a crack at getting a loan modification, however they need to deal with their credit being smeared for a few years.

The other reason are tighter lending standards for the self-employed in regards to taxable income qualifications, and less than stellar interest rates.

My advise is meet with a Mortgage planner and have them review your income to confirm if you qualify or not, and if not, determine what you will need to claim on your taxes to qualify for that loan you want.

What does qualify mean? 45% of your "gross" income can go towards this only.
• Home loans
• Credit cards
• Property tax
• Home insurance
• Student loans
• Car loans

If you are over this, by a few percent you "may" qualify yet not for the best rates.

If you find this info helpful, or not, and want to hear more on this topic please let me know by commenting on this blog, as well as, sharing it with friends, family, and co-workers