Even with the troubled economy, and bad housing market, getting mortgage refinancing, even with bad credit, is not as hard as it may seem. However, a big problem homeowners are facing right now is declining home values, bad mortgages, and other financial issues. If you are upside down on your home mortgage, and are looking to save money by refinancing, there is plans in place to get your the assistance you need. Here are some tips which will help get your approved when refinancing a mortgage:

Reasons Home Loan Refinancing Applications are Denied
Mortgage lenders and banks are only approving around 1 in 10 homeowners applications for refinancing. Most of the rejections are due to the home, its value, condition, and neighborhood, and not the actual homeowner. Most homeowners have ltv (Loan to Value) ratios which are to high, or even worse, some homeowners owe more than the home is actually worth.

A lot of talk is being spewed that indicates getting refinancing on a mortgage is near impossible due to the tightened credit markets. This is not true at all. What you are actually hearing about is banks not borrowing money and funds to each other, not individuals. This has to do with fear of a bank closing or losing all of its assets, and not with homeowner lending practices or policies. This is even true for homeowners with a credit rating which is not so good.

What to do if a Mortgage Refinancing Application is Denied
You need to regroup, focus, and do not take it as a personal attack. While getting denied does not feel good, you need to look at the long term, get things in order, and try again.

Do you know what your credit score is and if there are any inaccuracies in your report? This is one of the first things you should look into should you be denied refinancing. Analyze all the details of your credit report, and report and wrongs or inaccuracies. Mistakes and wrong information in your credit history will be detrimental to your rating, and loan worthiness.

The next thing you should do is take another look at your LTV and debt to income ratio levels. Do you have too many monthly debts and bills compared to how much you make? Are you able to pay off any lingering debts, or bills? Do you know your homes true value and when was the last time it has been appraised for its value? How much do you owe compared to the estimated market value of the home? These are common questions which will help you re evaluate your financial situation, and get a better chance of getting approval.

These tips will help you know what to do should you get denied a mortgage refinancing.

-M Petrone

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