Saturday, June 5, 2010

How are the refinances in today's market

In today's market, to get any kind of loan is tedious. Let's focus on refinaces now....or as we say refi's. Once the customer gets over the hurdle of picking the lender with the best rate and best closing costs.......which can be quite a feat.......then it's onto beginning the process. The customer is asked to pay approx $400 for an appraisal of their home so the lender will know what the value is. However, in today's market, it's hard to be able to foresee what the appraiser is going to come up with. Is he going to compare the home to a foreclosed home, is he going to compare it to a home that was sold as a short sale? This affects the value. Now let's assume the home comes back with a value high enough to make the deal work.......and this is where the fun begins......the amount of the appraisal determines the loan to value (LTV) and also can steer the customer towards the loan that is most attractive for that LTV. Then we have to get past or shall I say through underwriting at lightning speed before the rate lock expires. If the underwriter asks for a lot of information, the process can seem endless and daunting. It sometimes seems like they are trying to find reasons why they should turn it down. However, if you can make it to the closing table, it's a good thing for everyone.

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