People all around are inquiring about refinancing their home mortgage loans, due to the low mortgage rates. But unfortunately, most of the home owners seem to hit a wall as they cannot qualify for a refinance mortgage loan. Let’s explore the reasons as to why people are not eligible for a best refinance home mortgage loan which at an outward glance seems an easy enough process.

• Lack of Equity: Most of the home owners applying for refinance mortgage loans get rejected mainly because of lack of home equity ownership which just means applying for a loan higher than the value of the house they want to mortgage.

There are a few government-backed programs like HARP that deal with high LTV’s. This could be the best option for home owners stuck in this situation.

Big loan amount: If your loan amount falls into a higher cadre, and you don’t have good credit scores to back you up, then getting a refinance mortgage loan is highly impossible. These loans come along with a high-interest rate, and hence there will be more scrutiny involved when viewing your application. Once you are sure that you want to stay in the house for a longer haul, you can make it a cash-in refinance mortgage loan, by only bringing in money at the closing to get the loan amount down below the conforming limit.

Low credit score: If you are stuck with a less than perfect or a really bad credit score, then you can forget about being approved for a refinance mortgage loan. FHA loans are options available for people with low credit scores, but you need to put in a lot of legwork to find them. The best thing to do is to try and improve your credit score before you apply.

Bad job history: If you can’t hold a job for at least two years, the underwriter may deny your application. But then if you resume working, your loan application may be taken into consideration.