WSJ on Refinancing: Prepare for a ‘financial colonoscopy’

by Alex Stenback on May 20, 2009

The Wall Street journal today has up a very useful, succinct, and factually correct (terms not often associated with mainstream press coverage of mortgage related topics) piece on the challenges faced by would-be refinancers in a world where lending standards have tightened and home values have fallen.

This is a topic I’ve covered before, but the article is worth the read.  And it contains the best one sentence description of how much things have changed I’ve seen

“If you got your current mortgage in the past few years, when less documentation was needed, you may be surprised by the financial colonoscopy that awaits you.”

Word. 

And with mortgage rates sitting at or below (well below for the best of borrowers) 5%, it is worth it.

Go read the whole article – it is free at least for today for non-journal subscribers – and has very useful information on a number of key refinancing issues – from equity requirements, to getting a bead on your home’s value, to what to do if you have a second mortgage, and more.

{ 3 comments… read them below or add one }

Ray Klotz-Edina Realty May 21, 2009 at 6:43 am

As a realtor, I am ecstatic that mortgage colonoscopies are being performed. The sins of the past are reaping havoc in many communities through out the nation. Having sensible qualifation procedures now, will make the foreclosure/short sales of the future be in managable numbers. There are not many buyers that I currently deal with that have any problem with the current mortgage procedures. While they want to take advantage of the current real estate market, they do not want to be a negative statistic (ie.foreclosure) a few years down the road.

Jim L. May 22, 2009 at 5:40 pm

Boy is this true. My wife and I applied for a home mortgage from Wells Fargo on a townhome we own in Eagan free and clear the end of January. After 3 1/2 months of producing more documentation than a tax audit we finally got it. Our credit ratings are both around 800. I have been a customer since 1986 with savings, checking, 401′s and a another home equity loan that I was going to pay off on a home we own in California and yet I felt those thing did not matter. They thought maybe I was going to steal it from them. In the end, I am going to pull around $100,000 out of those accounts and move it somewhere else. I was very frustrated with the whole ordeal. At the time I had had 2 other homes I owned that had no existing mortgages on them

Edward May 28, 2009 at 6:42 am

We did a refi with WF in early April for our townhome, and I was suprised at how easy it was, but then I’ve never done a no-doc or other \funky\ loan. We had to produce the normal stuff, bank statements, pay-stubs, W-2′s….

The only thing was that they were busy ~ we closed April 2nd.

The old mtg was with Wells also, taken out in 2/07 at 6.25, we did a refi at 4.5, we have over 50% of equity… We also have all our accounts at WF and FICO scores both just over 800.

Just want to encourage anyone that may need it ~

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