Getting approved for a home loan
If you do not have sufficient equity in your home to payoff your current mortgage or cover your refinancing closing costs, then you should ask your lender to consider a “Write Down”. A “Write Down” is when your lender writes off the excess balance owed for the purposes of refinancing a loan. The Housing Bill that goes into effect on October 1st provide for a Write Down to 90% of the current appraised value for delinquent mortgage FHA refinances. Offering this option is at the discretion of the lender.
In today’s mortgage industry when it comes to getting approved for a home loan, it has substantially changed. Just a few years go it was very easy to get approved for all the loan programs being offered. Low credit scores and low or no documentation still got you approved which is why the housing industry is in the state it is now. Traditionally, low documentation used to mean no income verification but you needed to put 20 to 25% down, verify your assets and job. In the boom times, lenders left the ladder requirements out.
So, in today’s market what you can do to increase your chances of being approved is providing documentation to alleviate the lender’s concern and lower their risk. Besides the typical copies of W2’s, bank statements, and paystubs, you should also have readily available: