Buying a house and paying a mortgage is one of the biggest things that impacts personal finances. So if you want to keep up with what’s happening with your money, watch what people are talking about in social media about mortgages.
Ben Bernanke’s Mortgage Refinance Problem
The former Fed Chairman’s comment this week about being turned down for a mortgage refinance is blowing up social media.
Illustrating the difficulty that remains with the economy, the former chairman said at a conference in Chicago earlier this week, “I recently tried to refinance my mortgage and I was unsuccessful in doing so.”
What’s interesting is that Mr. Bernanke’s makes enough per speech to pay off his house with 3-4 speaking engagements, besides his other sources of income.
So, why was the chairman turned down?
1099 Income? Job Change?
Reports in the news present educated guesses as to why Mr. Bernanke was turned down. Two of the best guesses are that he has 1099 income rather than W-2, and he recently had a job change.
Whether one or both of these were reasons for Mr. Bernanke being turned down for a mortgage refinance is unknown to us, but there are still good lessons we can learn.
3 Lessons From Ben Bernanke’s Mortgage Refinance Problem
So here are 3 lessons that come to mind as a result of Mr. Bernanke’s refinance problem, which we hope will be helpful for everyone.
#1 It’s hard work to get a mortgage in today’s environment
First, we are reminded how difficult it is to get a mortgage. And certainly as mortgage brokers, we know that doing everything that’s required to get a mortgage is more difficult than ever.
As a result, it’s very important to use a mortgage professional to guide you through the process of getting a mortgage, and taking care of the complex details.
#2 Take care of mortgage changes before changing jobs
When you change jobs, it can be much more difficult to get a mortgage, especially if you are changing fields.
In some cases, you may need to be at a new job for a couple of years before you can document stable income. So, try to make changes in your mortgage before you change jobs.
For more in-depth information, see these 2 recent articles:
- Before you change jobs, know how it might affect your ability to qualify for a mortgage.
- How will a job change affect my ability to qualify for a home loan?
#3 Self-employed people have more difficulty getting a mortgage
As we have talked about many times, it is more difficult to get a mortgage if you are self-employed and receive a 1099 rather than a W-2 from an employer.
The reason is that your income will have to be documented in ways acceptable to the lender, which includes showing a stable income on past tax returns.
For more in-depth information, see these 3 recent articles: