Refinance Mortgage Rates In New Jersey

Written by on January 10, 2012 in New Jersey Mortgage Rates - No comments
Refinancing Your New Jersey Home…

Next to purchasing your home, refinancing is often the largest financial transaction you will make throughout your lifetime.  Often home owners will overlook the importance of a refinancing transaction because they, “already have the debt,” which is why it is important to understand the refinance transaction.  There are important factors that consumers ‘should’ know prior to refinancing.

How can I get the best refinance mortgage interest rate?
  • Credit Score – Your credit score is one of the most important factors.  Typically, mortgage lenders will look at all three of your credit scores and use the score that is in the middle.  To get approved for the best refinance rates your score needs to be over 720.  If it is below 720, you will start to see slight increases in the rate you receive based on the additional risk the bank must take on.
  • Your Income – Your income also plays a major role in determining which refinance rate you receive or program that you qualify for.  Typically, your monthly expenses (excluding utilities) should not exceed 45% of your gross income.  There are slight exceptions to this rule, but to be safe do not exceed 45%.  You also need to make sure your income can be easily documented.  This means being able to provide pay-stubs, contracts, tax returns, and bank statements.
  • Your Equity – When refinancing the third major factor lenders will look at is how much equity you have in your home.  Ideally you want your amount of equity (Loan-to-Value) to be 80% or below.  If you are above 80% you can still get your refinance loan, but you may pay a slightly higher rate or mortgage insurance.

Let’s look at what an ideal refinance situation looks like:

  • Home Type – Single Family Primary Residence
  • Current Mortgage Amount – $150,000
  • Appraised Home Value – $200,000
  • Income – $9,000/mo
  • Monthly Debt – $1600
  • Credit Score – 735

A borrower looking to refinance with the above credentials will most likely be approved for the best interest rate possible.

It is important to note that just because your “profile” doesn’t match the one above that you can not get approved for a loan.  There are many variables when it comes to loan approvals.  Each person will be looked at on an individual basis to determine exactly what refinance loan they can or cannot be qualified for.

While refinancing standards became very strict after the financial collapse of 2007-2008, we are beginning to see these standards and guidelines ease slightly.

If you have been fairly responsible with your credit and finances it is a good time to look into a new refinance mortgage. You can get started by ‘clicking here’ or completing the form on your right.

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