If you purchased a Boston high rise condo for sale and are thinking about refinancing the process is similar to getting a new Boston condo mortgage. The bank will request an appraisal, credit report and will check income verification. Here are 5 tips to help you in the process of refinancing your Boston condo.
Make sure you have enough equity
Many Boston condo owners are surprised to learn that they aren’t qualified to refinance especially if they own the condominium less than 3 years. Most lenders request that you have at least 20% in equity before you can refinance.
Don’t take on new debt
When you bought your Boston high rise condo you were probably advised not to take on new debt (make any large purchases on credit). This rule also applies to refinancing. Buying a car before you refinance will hurt your chances of obtaining a new loan. This will impact your debt-to-income ratio.
Check your credit score
Don’t go into a refinance application blind. No your credit score before you apply for a refinance. If there are any mistakes on your credit report get them corrected first before applying for a new mortgage.
Make sure you can pay for the closing costs
While its possible to roll the closing costs into the new loan most financial experts thinks its better to pay it up front.
Boston condo association can be a problem
Unlike refinancing a single-family house, a Boston high rise condo has stricter guidelines from FHA and other government agencies. Items that they look for are; resevers in the condo budget and owner occupancy are two examples.