100% Refinancing Guide

Summary

It is possible for many borrowers to get a 100% refinancing, including those with bad credit.

This type of refinance is usually a cash out refinance, where the borrower is using the increase in the value of the property to get cash out of the property.

Here are steps a borrower can take to help get a 100% refinance.

Basics

The following factors will help you get a 100% refinance:

• Good appraisal value
• Acceptable credit profile
• Income and asset documentation
• New co-borrower

Good Appraisal Value

The appraisal report for your property is produced by an appraiser. This person inspects the property and its condition, takes pictures, and generates a report that justifies a certain appraisal value.

The appraiser uses comparable properties among other methods to determine the value of a property.

This is not an exact science.

Always make sure your property is presentable for an appraiser. The appraiser will often photograph the front and rear of the property, in addition to the interior of the property.

A neat property will help the appraiser give you the best value for your property (within reason).

A messy or unkempt property (junk in the backyard, etc.) will not help the appraiser get you a good value. Because the appraisal report contains color pictures the lender’s approval staff will get a look at the property. They may also adjust the appraisal value of the property. Lenders usually accept an appraisal value from an appraiser, but sometimes lower the value and on rare occasions will raise the value.

Acceptable Credit Profile

You don’t need to have great credit. Many mortgage lenders offer 100% refinances to people who don’t have great credit.

One thing you can do even if you have bad credit is take care of some of the smaller problems on your credit report. These can be old cell phone bills that are in collections or other small items.

Straightening these smaller credit issues out can help you when lenders look at your credit. There are fewer things more irritating to a lender than a borrower with bad credit who has lots of small outstanding collections. It suggests sloppiness on the part of the borrower when they are unwilling to clean even small amounts up.

Income and Asset Documentation

It will help your application if you can document your income and assets. Many lenders offer loans where you “state” your income and assets, or “state” your assets and document your income.

In general the more supporting documentation you provide a lender the more likely you are to be approved.

New Co-Borrower

You may be able to add someone else onto your 100% refinance mortgage application. This is usually someone who is living in the property, such as a new spouse or a relative. If they have better credit and can add their income you may stand a better chance of being approved for a 100% refinance, or approval for the exact type of 100% refinance loan you are looking for.