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Follow on Google News | How to get the best of refinancingBorrowers are asked to supply personal and financial information, including homeowner association dues and more.
By: Your Loan Applicants should fill in information such as their social insurance number, legal name, email, and more. Banks ask about the primary residence of the applicant and whether it is a house, condominium, or townhouse. Applicants should also present statements that show whether they have funds in a retirement plan, investment, savings, checking, and other accounts. This helps banks to assess the financial situation of the borrower and his ability to make payments. Salaried employees are required to produce recent pay stubs that show their monthly earnings (1 month of verifiable income with the borrower’s name and employer showing on the pay stubs). Those in commission-based sales and self-employed individuals should supply information such as accountant’s references, proof of income, and others. It is important that self-employed persons have a chartered or certified accountant. Borrowers who refinance their mortgage loan should present information about their current expenses, including child support, loan and credit card expenses, rent, etc. Borrowers are asked to supply promissory notes, along with bank statements and the value of different asset accounts. Borrowers should present a description of their property along with the mortgage statement. The latter includes information such as current monthly payment, principal balance, and other charges. The mortgage statement also includes the phone number, address, and name of the bank or mortgage company as well as the escrow balance and taxed paid. Banks are interested in the borrower’s payment history, early repayment, interest rate history, and other details. Banks request that borrowers supply credit explanation letters for judgments, collections, and late and missed payments. Some borrowers are asked to present their balance sheets, profit and loss statement, and a list of all outstanding balances. Applicants should present legible copies of all documents, whether their profit and loss statement or driver’s license. In addition to documents to present, there are financial thresholds for applicants to meet. Financial institutions look at the borrower’s debt-to-income ratio, i.e. the percentage of monthly income that is used for debt repayment. The closing costs are an important factor and include document preparation fees, origination fees, and others. Borrowers also pay title search fees, prepaid interest, and appraisal fees. Refinancing is good for borrowers who are unable to meet their payments. Those who choose to consolidate their debts save on monthly fees and interest rate payments. It is a way to extend the repayment period and makes budgeting easier. There are various types of refinance loans such as cash-in, cash-out, 30-year mortgages, and others. Other examples are government and fixed-rate loans. Reference: YourLoan.ca (http://www.yourloan.ca/ End
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