Will The Appraisal On Your Delaware Home Keep You From Refinancing?
As a Delaware real estate lawyer, I’ve been receiving a lot calls from people who have questions about refinancing. This is the fourth installment in a series of articles dealing with refinancing. You can read the previous articles:
(1) Refinance Your Mortgage In Delaware; (2) Should You Pay Points When You Refinance Your Delaware Mortgage; and (3) Refinancing Your Delaware Mortgage? Be Aware Of The 3-Day Rule.
There’s no question that the interest rates being offered today are very attractive, and that you probably could reduce your payments of principal and interest each month by refinancing. Unfortunately, there are 2 stumbling blocks that have to be overcome in order to move forward.
Because of the collapse of our economy, it’s not as easy as it used to be to qualify for a mortgage. Your credit score and your income will be scrutinized carefully before a lender approves your mortgage application.
But even if you qualify, the numbers might not work out because of the decline in home values. If you borrowed 80% of the value of your home when you bought it (or the last time you refinanced), it’s very possible that the principal balance you owe on your old mortgage is more than 80% of the current value of your home. If that’s true in your case, then you can expect your new mortgage to have pmi (private mortgage insurance) each month. And if you have to pay pmi, that amount could easily wipe out the monthly savings you’re hoping to get by refinancing.
Be sure to discuss these issues with your loan officer or an experienced real estate lawyer
