In the last month, I have refinanced 3 different borrowers with mortgages that have interest rates above 8%. That's right, above 8%. In each case they had applied for mortgage from banks and were denied. The crazy part of each case was that their mortgage history was perfect, but they had other issues on their credit reports.
Banks normally won’t do mortgages for folks that have credit scores under 640, which is not an issue for us as long as they don’t go below 580. In each of these situations they had sufficient equity and income, but couldn’t find anyone that could do a refinance for them.
Collection accounts, most of which were medical, continually affect credit scores. One common issue that affects credit scores are high credit card balances. Most folks believe if they make these payments on time, that their credit scores will improve – the sad news, no they won’t.
In each of these refinances, we paid off the mortgages, so that they had enough money left over to pay down the credit card debt. For these three refinances, we saved then between $393 to $705.
Can you imagine getting a raise between $4,700 to $8,400 per year?
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By: Rick Roque