Refinancing your mortgage is usually easier than getting a new mortgage, assuming you’re able to refi in the first place. However, refinancing can still be difficult if you don’t handle common problems in the correct way. Here are five refinance obstacles to watch out for and their solutions:

You Have Diminished Equity

Many Americans can’t refinance as a result of not having enough equity. When this is the case, a refinance is no longer possible. If you’re seeking a refinance, you will find that many lenders will deny the loan if your home’s present value can’t secure enough funding to cover the new balance.

Solution: There is no easy solution for this problem, but the best way to remedy this is to keep making mortgage payments on your current mortgage until you have regained your value. If you’re underwater, you may be able to perform a refinance through HARP, depending on your loan program.

You Recently Refinanced

If you have recently refinanced within the last six months or year, you might not be able to refinance anytime soon.

Solution: There isn’t a simple way to get around this problem, but you can always speak to your lender to see if he or she is open to refinancing your loan again. If not, you can speak to other lenders to see if it’s an option.

You Don’t Occupy the Property Anymore

If you’re trying to refinance a home in which you no longer live, you will need a larger amount of savings and home equity. Investment properties are very risky, so you will need to comply with the necessary regulations associated with refinancing.

Solution: If you are planning on leaving your home, refinance it before you leave. If you have already moved out, you don’t have many financing options.

You Haven’t Kept Up-to-Date on Your Current Mortgage

If you want to refinance your home loan, you must prove to your lender that you are reliable. Therefore, if you haven’t made consistent payments on your current mortgage, you will be seen as a bigger risk.

Solution: Don’t apply for a refinance loan until you have a better loan payment history. This will increase your chances of being approved, and you might be able to qualify for lower rates. Another option that may help some borrowers who are behind is the Home Affordable Modification Program, or HAMP.

Your Credit Score Has Fallen

If your credit score has decreased, you will represent more of a risk to your lender. Lenders frequently deny refinance loan applications if a borrower has a low credit score.

Solution: Bad credit borrowers must wait and establish good credit once again before applying for a home refinance loan. Make sure you review your credit history to eliminate any errors that could be affecting your credit score.

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