Refinance Advice

I just spoke to a career mortgage broker and lifelong mortgage banking industry executive friend of mine in Southern California who has a track record of making six and seven figure income annually regarding the specific question,” Is refinance CA actually happening?”, he assured me that CA refinance loans are being closed everyday. It seems it is taking a little time for the whole refinance phenomenon to gather up steam.

At this point in the conversation, he offered some classic advice which actually comes from somewhere back in time around the 400’s BC, where, at the end of the Mediterranean, we can still hear the clarity and wisdom of a man named Euripides reverberating down through the ages, saying to those who will listen,

“There is in the worst of fortunes, the best of chances for a happy change.” Euripides

Having taken this to heart, one begins to think more clearly immediately. The economic engine is trying, and in time, will, restart itself. In the meantime, get your hand out of the refinance cookie jar, if necessary. Think and research heavily before you act in that direction – avoiding the inevitable credit rejection dings on your credit report is a step in the right direction. No, you are right, what has happened to the equity in your property is not your fault, but relying on it, as if it were the rock of Gibraltar, may be. As you study CA refinance possibilities, and keep studying them, here is a short list of things that can only help:

Improve your family’s combined income, beginning immediately
Eliminate all expenditures that aren’t absolutely necessary – yes, I mean in a primitive sense – get it down! Get your credit report tidy!
Make sure your property and the neighborhood you live in do not start going down hill – get your neighbors involved if necessary.
Analyze why you need to refinance and make sure your reason is legitimate under the current circumstances – i.e., don’t refinance just so you can make that annual $10,000 spree at a favorite casino this year. According to Freddie Mac 2009 statistics, 33% of homeowners who successfully refinance to pay down their mortgage loan balances.
Keep your eyes and ears open for new loan possibilities. FHA is still financing up to 97.5% loan to value. Lenders or mortgage brokers may have some possibilities that use FHA resources – look for a mortgage broker that has a provable track record in closing these kinds of loans. Only use a mortgage loan broker who can prove his ability to get you the refinance loan. Anything less is all but guaranteed to waste your precious hopes and time.
Keep your payments current and keep out of foreclosure, you can save your home and in the end, after all of this is over, you will be glad you did!

When approaching a CA refinance there are a few things to consider that are somewhat specific to California. California has a large income to mortgage balance problem. According to statistics California borrowers are still attempting mortgages that are 6 times their income with very little down. In the current economy this is not a smart move. Experts agree that 3 times income with at least 20% down is the preferred ratio.

Also, refinancing in California has been hampered by the loss of equity and California was hit hard in this area. Housing was very over priced at the peak of the real estate boom, so even some homeowners who purchased “low priced super deals” a year ago are in negative territory. Many counties in California have very high foreclosure rates which affects property prices in a negative way.

If you have owned your home for some time, your equity may still be intact. If this is your situation it might make sense to take out a CA refinance loan if you are not looking for cash. The majority of refinance loans are now “cash in” loans where homeowners are refinancing to increase their equity.

If you analyze your situation carefully, look at the future of the California real estate market prices, and proceed wisely you should be able to be successful with a CA refinance loan.

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