Qualifying for a mortgage is tough for many homeowners, especially ones with credit or income challenges. You and your house have to meet the rigorous guidelines of Lenders to get a loan approval these days. It is important to understand where you stand before beginning the mortgage application process. You should organize your income and asset documents and know your credit score.
Keep in mind that it is no longer just how timely you pay your monthly payment or how high your credit score is. The assets you have, the debt you carry compared to your income ( Debt to Income ratio) and the appraised value ( Loan to Value ratio) of the property all greatly impact your ability to get approved.
If you are looking to extract equity from your house by getting a cash-out to refinance mortgage, the scrutiny may be even closer.
Every lender has its own set of qualifying criteria. Of course, there are industry guidelines that they are required to observe but credit committees have the final say.
It is important to note that If you have been turned down for a cash-out mortgage at one bank, you may find the requirements different at another lender.
If your cash-out mortgage application is denied and you don’t want to move from your home, there are other options now available to you.
A Leaseback of your house may solve your financial needs. With a Leaseback, you can sell your house to an Investor/Buyer and stay in it as a renter without all the expenses of ownership. You are able to receive the equity locked in your house after standard closing costs are deducted and remain in your home with a lease agreement in place.
Homeownership carries great responsibility and sometimes a heavy financial burden that impacts the decisions you make. When you are faced with financial circumstances that are not getting resolved the traditional way, you have to think outside the box. A Leaseback may give you the ability to access needed funds without disrupting your living situation.