Mortgage  Question?
Easier Qualify New Mortgage if Smaller Than Current?

Is it easier to qualify for a new mortgage if your new loan is smaller than your current mortgage?

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience

It should be easier to qualify for a smaller mortgage amount but it is important to keep in mind that the mortgage process starts over when you apply for a new loan. So if you experienced changes in your credit score, debt-to-income ratio, employment history or other mortgage qualification factors, that can impact your ability to qualify for a mortgage. For example, if you credit score decreased, your monthly gross income declined or you incurred a significant amount of additional debt, it may be more difficult for you to qualify for a mortgage, regardless of you loan amount.  Additionally, a change or a break in your employment may also make it more challenging to qualify.

If your credit score, monthly gross income and debt and employment situation have remained relatively steady, then it should be easier to qualify for the lower loan amount. Simply put, if you meet the lender's qualification guidelines, you should be approved for the mortgage. If you do not meet the lender's qualification guidelines, you will not be approved for the mortgage, regardless of how small your new loan amount is as compared to your current loan.

We always recommend that you contact multiple lenders to understand how they would handle your unique situation. You can review lenders in your area by clicking MORTGAGE RATES We advise you to contact at least four lenders as as qualification guidelines vary. Plus, shopping lenders is the best way to save money on your mortgage. You can also use our Free Personalized Mortgage Quote function to receive no obligation mortgage quotes from up to four lenders.

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About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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