Refinance Decision Require Savings

by Brandy
(North Providence RI )

Ask Kate: Refinance Decision Require Savings My parents were trying to refinance their home. The mortgage company that they were working with told them in order to do the refinance that they needed to have $3000.00 in the bank. If they had that much money in the bank they would not have to refinance.

Why are lenders requesting that money in the bank?

Kate Answers: Refinance Decision Require Savings

Hi Brandy, This is the million dollar question - second only to inquiring why mortgage companies lend money for home loans to people who do not need mortgages.

Short of describing mortgage banking decisions based on risk analysis, I'll just address the real issue: How can your parents refinance without having enough savings in the bank to satisfy a lender?

Most mortgage programs require a homeowner or home buyer to demonstrate a savings balance equal to two months of mortgage payments. The most popular exception for years was the subprime mortgage program which in part led our financial markets into such hot water.

FHA Mortgage Loans To The Rescue

But there are another programs, tested over time, which in general do not require much in reserve savings, FHA home loans.

Not all lenders are approved to originate FHA mortgage loans so you will need to ask your mortgage lender if they can help you with FHA.

Depending on the age of your parents, the FHA Reverse Mortgage is a secure option for Seniors.

Best wishes. My door is always open.




P.S. Go to my Best Mortgage Rate Blog, an entertaining source of mortgage information. Subscribe now to the RSS feed.

Finding FHA And VA Help You Need

Today's FHA home loans are new and improved. Could low down payments be the solution for you?

FHA loan requirements, and there's plenty of them, weren't taught in school. But I can help with this. Here's how.

Join in with other Americans benefiting from FHA mortgage loans.

FHA Appraisal - Lenders require appraisals. Your Realtor says every smart buyer uses a home inspection. Why both?

Every time you call an FHA lender about a refinance, do you hear FHA Loan Limits are too low for your area?

What could be simpler than FHA Streamline Refinance?

FHA Refinance - Despite the myths, there are powerful benefits to refinancing with FHA mortgage loans.

Does our government owe you FHA refunds?

FHA Reverse Mortgage - Income and security for Seniors minus the payment.

Leaky roof, broken steps, peeling paint. FHA Rehab Loan to the rescue!

If you attempt an FHA Eligibility Calculator, without knowing the questions lenders will ask, you could miss out on a big opportunity.

Three powerful but simple tips to finding your best FHA Lenders.

VA Mortgage Loans - Zero down payment home loans for active military and veterans.

Ask Kate About FHA And VA - Ask a question to get an answer from Kate.

FHA and VA HQs - A complete collection of questions about FHA and VA, each with a individual answer from Kate.

Return from Refinance Decision Require Savings to Get Your Best Mortgage Rate

The information you obtain at this site is not, nor is it intended to be, a substitute for financial, real estate or legal advice. You should consult an attorney, accountant, lender or real estate agent, as applicable, for advice regarding your individual situation. Comments and opinions found here are not necessarily those of Get-Your-Best-Mortgage-Rate.com