The former Chairman of the Federal Reserve, Ben Bernanke was recently denied a mortgage when he and his wife tried to refinance their home.
With mortgage rates still at historically low rates, Bernanke like many Americans, sought to take advantage of the current situation… but he was stopped dead in his tracks.
But why? Surely a man such as Bernanke has good credit and plenty of assets… after all, he recently received $250,000 for a 40 minute speaking engagement in March at a forum in Abu Dhabi.
Well, even though mortgage rates are low, not everyone is able to take advantage of them. Stricter and inflexible lending standards are likely to blame.
It’s likely that Ben Bernanke’s loan was rejected due to the fact that he can no longer show two years of stable income from the same source… even though a couple more speaking events and he could pay off his $672,000 current loan.
“Households that fail to refinance their mortgage when interest rates decline can lose out on substantial savings,” according to a recent study by the National Bureau of Economic Research.
Many people who want or need to refinance are not able, not because they can’t show they consistently make $250,000 for 40 minutes of work, but because their credit score is just too low to allow them to be approved.
You may have heard that Ben Bernanke, former chair of the Federal Reserve, cannot refinance his home. That’s surprising, right? If someone like him can’t, what does that mean for you?
The truth is, refinancing is not always easy. Even if you have good credit, you need income, savings, and a stable financial situation. Many people assume that low-interest rates automatically mean anyone can refinance. But that’s not the case.
Why Bernanke Can’t Refinance
Bernanke’s situation is different. He lives on a fixed retirement income. Lenders want proof that borrowers can make payments. Without regular income, refinancing becomes difficult. Even former officials face these rules.
This shows that refinancing depends on your finances—not just the interest rates.
What Does This Mean for You?
If you want to refinance, you must meet certain conditions. Lenders look at your income, debt, and savings. They also check your credit score. Without these, refinancing may not be possible.
Before applying, review your finances. Make sure you have enough income to cover your payments. Reduce your debts where you can.
Smart Steps Before Refinancing
Check Your Credit – A higher score helps you get better rates.
Review Your Budget – Ensure you can afford the payments.
Save for Costs – Refinancing comes with closing fees and other charges.
Talk to a Professional – A mortgage expert can guide you through the process.
Don’t Assume It’s Easy
Low rates are tempting. But lenders are cautious. Even experts can’t bypass these rules. That’s why you need to be prepared.
Refinancing works best when you plan ahead. Take the time to organize your finances before applying.
If you find yourself struggling with a poor credit score and debt, or would like to find out about becoming debt free, call Debthelper at 800-920-2262, or visit @ www.debthelper.com.
Final Thoughts
Ben Bernanke’s story teaches us an important lesson. Refinancing is not just about rates—it’s about financial stability. Before you apply, make sure you understand the requirements. If you prepare carefully, you can increase your chances of approval and secure better terms for your mortgage.
Refinancing is a tool, not a guarantee. Approach it wisely, and you’ll be ready when the time is right.
