Frequently real estate investors use cash-out refi’s as a vehicle to take equity out of properties they own for re-investment. It is common to rotate equity reduction from properties on a cycle and is an excellent vehicle for re-investment and therefore expansion of leveraged appreciation. One must remember the 4 reasons for owning commercial property and use the proper strategies for expanding your overall income.

When working with your mortgage professional you should have them review your credit file and give you a copy so you can identify any mistakes. Sometimes people will have a small collection amount they are not even aware of and which should not be there. This will affect your fico score. Correcting these mistakes can improve your fico score by 20 or 30 points (or more) in a short time.

If you have a high fico score the lender will offer you a lower rate because they view you as a low risk of default. Paying your bills on time and lowering your credit balances will improve your fico score. Check your credit report to ensure that it is accurate.

Sometimes, cash out from a refinance is used for home improvements. This can help increase the value of the home.

Credit scores and other information contained in the credit report are the most important factor out of the three major criteria banks use to underwrite a mortgage loan application. The other two criteria are repayment capability and borrower investment in the subject property. It is much easier for a home buyer with good fico scores to get a no income disclosure or no down payment mortgage than for a borrower with excellent income and asset to get a no credit loan.

When consolidating high interest revolving debt like credit cards, it’s very possible to see enormous monthly savings in your monthly expenses.

If you plan on closing any credit cards, wait until your loan has closed, as the number of trade lines affects your fico.

Proper planning and establishing a long term relationship with a broker can make your goals and dreams come true. A well planned cash out refinance can make paying for college, for example, a stress free time allowing you to enjoy the thrill of watching your children grow and learn!

A common misconception about credit scoring is that multiple mortgage inquiries will negatively impact your credit score. Inquiries within the same industry such as the mortgage industry within a 30 day period are counted as one credit inquiry. Factors such as recent delinquencies, credit card balances close to their limit’s, or a limited credit history have much more impact on credit scoring. The major credit agencies have this information posted on their web sites.

It is very important to limit the number of credit inquiries during the qualification process. This applies to all inquiries, including auto and installment loans.