It used to be very easy to refinance a mortgage, a couple of years ago virtually every application was approved. That is not the case anymore, banks are much more selective about who they give loans to. Unfortunately there are more people who need to refinance now than ever before. This does raise the question of what do you do if your refinance application is denied.
The first thing that you are going to have to do if your refinance application is denied is to figure out why it was denied. The most common reason is that the value of the home is less than the amount that is owed. If this is the reason that you were denied and your payments are current the best thing to do is look for lenders who are participating the Home Affordable Refinancing Plan. Under this plan the government provides incentives for lenders to refinance loans that have values that are higher than the house is worth.
If you are behind on your mortgage payments and you owe more than the house is worth you won't be able to take advantage of the Home Affordable Plan. In this case the best option is usually to talk to your bank about a loan modification. The last thing that the bank wants is to have to foreclose, especially if you owe more than it is worth. In most cases the banks will work with you to modify your existing loan to make it easier for you to pay it. Going this route will hurt your credit but it might also save your house.
The other likely reason that you would be denied when you apply to refinance is that you have bad credit. If this is the case you will have several options. The first of these is to simply delay your refinancing and work on improving your credit. In most cases you can make some pretty dramatic improvements pretty quickly. Your credit of course won't be perfect but in most cases you won't need it to be perfect in order to be able to refinance your mortgage.
The other option that you have if you were denied because of credit issues is to look for a lender who specializes in refinancing people with bad credit. You will have to pay more if you refinance through one of these lenders so you will have to seriously consider whether it makes sense. There are all kinds of lenders who specialize in these kinds of loans so you will no difficulty in finding one. The challenge will be finding the one who will give you the best deal. The easiest way to do this is to work with a mortgage broker. There are brokers who also specialize in refinancing for people with bad credit so this is your best option.