LTV and Refinance Rate

How important is LTV when shopping for a mortgage refinance?

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Bill's Answer: Answered by Mark Cappel

Generally speaking, yes, your loan-to-value (LTV) is one variable in the equation mortgage underwriters consider when setting a rate. The other variables includes an applicant's credit score, income history, and the length of the loan.

You mentioned a rate of 4.375%. As I write these words in early October 2010, that is a competitive rate for a 30-year fixed-rate refinance, but less than stellar for a 15-year fixed-rate loan. If you are refinancing to a 30-year loan, you must have a lofty credit score and long, stable income history. If the rate you were quoted was for a 15-year loan, then either your mortgage company is not very competitive, or your credit score or job history make the underwriting department nervous.

It pays to shop around when refinancing. Visit the Bills.com mortgage refinance savings center for no-cost quotes from up to five pre-screened mortgage companies.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

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