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I Didn’t get the Cash Out I Wanted on My Mortgage Refinance, What can I do?

I Didn’t get the Cash Out I Wanted on My Mortgage Refinance, What can I do?

I Didn’t get the Cash Out I Wanted on My Mortgage RefinanceSo those borrowers who would like to refinance and pull “Cash Out” of your home but were turned down or told the home didn’t appraise for enough, there are some options which you can do fairly quickly to change your outcome.

1. Increase your credit score.

Often, lenders have a limitation on how much cash they can lend, many times, it may be due to credit score. For example, you may be able to borrower up 70% of your home’s value at a 640 score on a conventional loan, but if you have above a 700+ score, you may be able to go up to 85%

2. Apply for a renovation loan.

Many borrowers just want the cash for home improvement, unaware that a renovation loan is what they need. In some cases a renovation loan appraisal can yield a much higher value because it can value the home, “subject to” the improvements being done which is rare. Due to the their technical nature, a renovation loan isn’t common. However, they can be well worth it, with the right circumstances.

3. Apply for a HELOC

A HELOC is a Home Equity Line Of Credit. This is technically a 2nd mortgage but has a lot more flexibility to pull cash out and repay. They also can go to a higher Loan-To-Value than most other products.

So, what do you do if this is you? Like anything when you are dealing with professional services…get a second opinion and ask them about any of the above options.

Loan Closing Tips: What Not to Do

When Tom and Becky started their home search they checked their credit scores first. Tom’s was a respectable 730 and Becky’s was 710. They did their homework too, shopping around for the best interest rate and getting prequalified for a loan before they started going to open houses. A short time later they found the perfect home at the right price.

On the night of their scheduled closing they were ready to sign when their closing officer’s cell phone rang. He handed Tom the phone. Their rate was much higher than Tom expected and the loan couldn’t be approved after all.

It’s a scenario many potential homebuyers fear. And while it is rare, it does happen. It happens when prospective homebuyers go on credit card binges, buying big ticket items for their new home like furniture, paint and appliances once their loans are approved.
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