One of the trending topics on Facebook this morning caught my attention. The headline of the linked article simply said: "Ben Bernanke Can't Refinance His Mortgage." If you're a mortgage broker or even remotely interested in home loans, that should get your attention! The guy who set the course for interest rates for the entire country can't get a bank to refinance his home loan? Yeah, I know, it seems ridiculous. Reuters news service reports that Mr. Bernanke makes some pretty good money; reportedly $250,000 per speech!
So why in the world can a guy who makes so much money from giving a speech get denied when it comes to refinancing his home loan? Well, there are a couple of explanations that explained why Ben Bernanke Can't Refinance His Mortgage.
Possibility #1: Rates.
Let's just say while that Mr. Bernanke managed interest rates for the country, his spouse was watching those rates drop and decided it was time to refinance, while you can refinance as much as you want, it's not always the best decision. So if the Bernanke's already had a really low rate, it's possible that the bank they want to refinance their loan can't offer them a better rate and that's why they can't seem to get a better rate for their mortgage - it doesn't exist in today's market.
Possibility #2: Automation.
Everyone who works in mortgages or deals with mortgage lenders knows that buying a house was a lot simpler just a few years ago. Getting Pre-approval used to be so simple that anyone could do it and get pre-approved for just about any amount of money they wanted. But with the mortgage crash, all of that "Easy Money," dried up and what replaced it was a complicated algorithm that determines your ability to repay the mortgage based of credit history and employment histories and gives lenders less room to 'eyeball' someone to see if they'll repay their mortgage. This leads us to our next explanation of Why Ben Bernanke Can't Refinance His Mortgage.
Possibility #3: His Job.
As we mentioned in point above this, you have to meet certain requirements that attribute your risk factors and Mr. Bernanke has a big one when it comes to purchasing a home or refinancing your home: he has a recent job change. When we mere mortals look up at these lofty leaders like Bernanke we forget that when it comes to mortgages, those that dwell on Mt. Olympus must also meet the same requirements! So the easiest possible solution is that with Ben's recent job change the bank sees his loan risk at a higher level, (just like if you or I tried to refinance after a recent job change.)
In the end, we all have to meet requirements and banks have to make the right decisions when lending money, even if that means that Ben Bernanke Can't Refinance His Mortgage.