Unfortunately, it's pretty unlikely... but not impossible. You should apply and see what happens and also make sure that you know all of the variables that go into a mortgage underwriter's decision when looking at a refinance application.
The only way todetermine whether or not you will qualify for a refinance loan is to apply for a loan with several different lenders and/or brokers. Unfortunately, it is very difficult to get approved for 100% loan to value (LTV) loans given the state of the credit markets, but I'd suggest applying and seeing what happens.
The only way todetermine whether or not you will qualify for a refinance loan is to apply for a loan with several different lenders and/or brokers. Unfortunately, it is very difficult to get approved for 100% loan to value (LTV) loans given the state of the credit markets, but I'd suggest applying and seeing what happens.
I will add something in this-
Here are the main considerations that a lender will consider:
First, your credit history is a major consideration when you are shopping for a new mortgage. A favorable credit score will increase your chances of finding the best loan with a low rate and low points, since you will qualify for better interest rates than those available to people with credit problems. Currently, the average interest rate for a new 30 year fixed-rate loan is 5.75%, and the average FICO credit score is 723. So, if your credit score is better than 720, you should expect to qualify for an interest rate of around 5.75%, or possibly lower. However, if you have had credit problems in the past, you could be forced to pay a significantly higher interest rate, which could make your monthly payments much higher. For example, the monthly payment on a $100,000 30 year mortgage at 6.5% is approximately $630, plus insurance, taxes, etc. If the interest rate on the loan increases to 9.5%, the monthly payment increases to $840, an increase of over $200 per month. As you can see, your credit score, which is one of the major determinants of your interest rate, is extremely important when shopping for a new mortgage.
The amount of equity you have in your home (or its inverse - the loan to value or LTV), and the length of time you have been paying on your current mortgage will also be major considerations. In order to lower your payments, you must either obtain a loan with a lower interest rate than your current mortgage, find a mortgage with a longer repayment term, or borrow less than the original balance of your current mortgage. For example, if you have $60,000 left to pay on a $100,000 mortgage, you could cash out $40,000 in equity and keep the same monthly payment as the old loan, assuming the interest rate and loan term remain the same. However, if the balance of your new mortgage will be more than that of your old mortgage, you must either find a lower interest rate or take a loan with a longer repayment term, if you want to keep your monthly payments the same. The ways to build equity are to
either pay down your mortgage over time or to build equity by your home appreciating.
The third big variable is your debt to income ratio, or DTI. Debt to income is taken as a measure of your ability to comfortably make payments on the mortgage with your cash flow. Most lenders look at combined DTI, so the percent of your income that goes to debt payments (including mortgage, auto loans, credit cards, etc) to make sure that you can afford the loan. Some borrowers will allow stated income loans, where income is not formally verified, although given what has happened with defaults it is less likely than ever to get approved for a high DTI stated income loan.
Here are the main considerations that a lender will consider:
First, your credit history is a major consideration when you are shopping for a new mortgage. A favorable credit score will increase your chances of finding the best loan with a low rate and low points, since you will qualify for better interest rates than those available to people with credit problems. Currently, the average interest rate for a new 30 year fixed-rate loan is 5.75%, and the average FICO credit score is 723. So, if your credit score is better than 720, you should expect to qualify for an interest rate of around 5.75%, or possibly lower. However, if you have had credit problems in the past, you could be forced to pay a significantly higher interest rate, which could make your monthly payments much higher. For example, the monthly payment on a $100,000 30 year mortgage at 6.5% is approximately $630, plus insurance, taxes, etc. If the interest rate on the loan increases to 9.5%, the monthly payment increases to $840, an increase of over $200 per month. As you can see, your credit score, which is one of the major determinants of your interest rate, is extremely important when shopping for a new mortgage.
The amount of equity you have in your home (or its inverse - the loan to value or LTV), and the length of time you have been paying on your current mortgage will also be major considerations. In order to lower your payments, you must either obtain a loan with a lower interest rate than your current mortgage, find a mortgage with a longer repayment term, or borrow less than the original balance of your current mortgage. For example, if you have $60,000 left to pay on a $100,000 mortgage, you could cash out $40,000 in equity and keep the same monthly payment as the old loan, assuming the interest rate and loan term remain the same. However, if the balance of your new mortgage will be more than that of your old mortgage, you must either find a lower interest rate or take a loan with a longer repayment term, if you want to keep your monthly payments the same. The ways to build equity are to
either pay down your mortgage over time or to build equity by your home appreciating.
The third big variable is your debt to income ratio, or DTI. Debt to income is taken as a measure of your ability to comfortably make payments on the mortgage with your cash flow. Most lenders look at combined DTI, so the percent of your income that goes to debt payments (including mortgage, auto loans, credit cards, etc) to make sure that you can afford the loan. Some borrowers will allow stated income loans, where income is not formally verified, although given what has happened with defaults it is less likely than ever to get approved for a high DTI stated income loan.
Mark,
If you qualify for the DU Refi Plus program, then yes you could qualify without equity or any money to bring to the table.
If you qualify for the DU Refi Plus program, then yes you could qualify without equity or any money to bring to the table.
