Refinance Waltz: 3 Easy Steps

Mortgage and refinance rates rise, fall, and tread water from week to week. All of the talking heads seem to be trying to reach a consensus on what the Canadian market has planned next. The only consensus seems to be that the outlook in Canada is partly cloudy, which is a far cry better than conditions in the U.S.

Canadian lenders have circled their wagons and taken up a defensive posture in an effort to stave off a full blown U.S.-style credit crisis and accompanying mortgage meltdown. Some prominent lenders have exited stage left, and the actors left on stage are all doing the same song and dance. If you’re looking for a good dance partner, here are the steps you need to take to ensure that your dance partner/mortgage broker are dancing to the same song.

• Clean up your credit report – If you have negative entries on your credit report, they can have a dramatic impact on your ability to obtain the financing you want, need, and think you deserve. These negative entries don’t cast you in your best light, and can have the same impact on a loan application a piece of lettuce might have on a potential dance partner. Take the time to clean it up and your chances go up dramatically. If you have multiple negative entries, your credit score could be low enough to keep you locked out of the loan you want. The sooner you clean it up the sooner you can be headed towards the dance floor with a good mortgage partner.
• Shave as much outstanding debt from your financial life as you can – A rough, unkempt appearance will turn you into a wallflower at a dance, and too many debts can shut you out of the mortgage partner you’ve been dreaming of. What’s your debt to income ratio? The lower you can get that number, the healthier your loan application will look. If you have excess credit card debt on a single card – more than 80% of its credit limit – either pay it down or transfer it to a card with a lower ratio. Shifting debt like this may not change your overall financial health, but it has the same effect that running a comb through your wind-blown hair does: It just makes you look better.
• Put a nice shine on your presentation – Shoes don’t make the man. But they do make him look better. The same goes for your relationship with your prospective broker. Be honest about what you want, need, and are seeking. By sharing as much information with your broker as you can, you can make his or her job much easier. Maintain total honesty about everything. Don’t be secretive or coy about important details, because your broker is the key that can put you in the driver’s seat of the perfect loan. Demand the best from your broker, but also give him the best. That will help ensure not only a smooth ride to your refinancing dance, it will also help ensure that you have a memorable experience with dance partner that won’t keep stepping on your toes.

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