"The blog, Straight Talk About Mortgages.) says homeowners considering a new loan, who want to avoid the time and expense of making a formal mortgage application to determine whether they qualify, should try another route.“Find a real estate agent who really knows the area, and ask them to come out and take a look at the house,” he said. “Tell them they’re not thinking of selling it, but want an idea of what it would appraise at.”If the agent’s informal appraisal is close enough to the figure you would need to qualify for a refinanced loan or a second mortgage," Mr. Vanderwell , the author, says, "it is worth applying. If it is significantly below, you are better off waiting for conditions to improve. "

Homeowners with secure jobs and no immediate plans to move will often watch mortgage rates anyway, just in case they have the opportunity to refinance their loans. But few of them will regularly bother to check housing sales or foreclosures, which could also affect their ability to refinance.The market downturn has greatly reduced home values in many parts of the country, leaving homeowners with significantly less equity in their properties. According to Cameron Findlay, the chief economist at LendingTree, home prices nationally have slipped to 2003 levels.If a borrower’s home equity falls below 20 percent, he or she must buy private mortgage insurance for a new mortgage, which adds to the loan cost, at least until the equity reaches the level where the insurance is no longer needed. So, depending on when a home was bought, refinancing now may not be a viable option.
By Bob Tedeschi, April 28, 2010 NYT

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