Refi and Home Finance

It wasn’t that long ago that banks would lend money to anybody who had a pulse. If you wanted to refinance your house, all you had to do was call a lender. They would ask you a few questions over the phone, and that was about it. In fact when I refinanced my home several years ago I did what was called a “stated income” loan. The lender literally told me that they would not be verifying my income and then followed up with the question “How much do you make?” Well we all know where this kind of lending got the banks! Now if you want to refinance your home, it is not quite as easy as telling the bank what they want to hear.

But does that mean refinancing is no longer possible? No, it is just a little more difficult. Rates are really low right now, so refinancing might be a great idea. But now you are going to be required to document things. You are going to have to prove that you make however much money you say you make. You are also going to have to have your assets verified. Yes, it can be a daunting task. And yes, the banks are going to make you jump through burning hoops. But in the end if it saves you a ton of money, then I think it is worth the hassle.