Rates are Down but Some Borrowing Still Tough
Posted on | December 18, 2008 | No Comments
This past week has been a rough one for some of the people I have talked to, all of who have multiple houses and are paying their bills and mortgages on time. The issues have to do with being self employed and not showing enough income on taxes and wanting to refinance a second home for cash out.
Since every loan is basically a full documented loan these days it means that you have to prove your income. There is no more stating an income or doing a no-doc loan. These loans, at least for now, are a thing of the past and no one expects them to come back any time soon, if ever again. Lenders want to see income and it needs to be income that has come in over the last 2 years, or capital gains income that has been consistent for 3 years.
The other restrictions have to do with cash out refinances. There are no cash out refinances for second homes, period. The only loans that you can get above 85% cash out are through FHA and they are still at 95% though we have heard that they are lowering it to 85% as well. We just don’t know when. So if you think you are going to take advantage of this low interest rate, you may want to think again if you can’t prove your income, meet the debt to income ratio or try to get cash out with little or no equity in your home. It can be a tough row to hoe and the only way to see if you can qualify is contact your lender and go through the motions.
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