Refinance question,can anyone help me?
I have friend who resides in Wash. DC. She is
retired on a limited fixed income and owns a home
worth about $130,000, and has about $50,000 in equity.
Her interest rate is presently 9.5%. She wants to
refinance. The going rates in the area are about 6.5
to 7.5%. Her monthly mortgage payment now I believe is
about $550 or $600 per month. Her fixed income I
believe is about $1500 per month I believe. She wants
to refinance from the 9.5% down to the going rate of
approx. 6.5%. So far she has checked with about 3
companies and from what she tells me they say because
of her income she could not get these low rates. Does
anyone know why she would not be eligible? It would
seem to me if she can now pay the $600 per month at
the 9.5% with no problem, why would there be a problem
of refinancing at a lower rate and paying a lower
monthly mortgage?
-Standard underwriting won't allow lenders to loan a
mortgage unless the mortgage payment is less than about
25-30% of income. So even though she "ought" to qualify
because it would lower the risk, it's unlikely any will
take the chance. The best hop