FHA Loan

Changes to the FHA Streamline Refinance program in 2012 will provide big savings for Orange County FHA borrowers whose loans were closed and endorsed by HUD on or prior to May 31, 2009. Current Orange County FHA borrowers can refinance to a lower interest rate without dealing with the currently higher annual mortgage insurance premiums. For those whose current FHA loan was closes after May 31, 2009, this won’t help. But for those with loans closed prior to May 31, 2009, this will be a tough deal to pass up.

What is the FHA Streamline Refinance Program?

The FHA Streamline Refinance has been around for years. It allows those who already have an FHA loan to refinance when interest rates drop without needing an Appraisal. Also, since debt to income ratios are not calculated, no income documentation is required. The Orange County FHA lender does need to verify the borrower has a job. The loan is known as a “Streamline” because of how much easier the process is compared to the original purchase loan process. FHA requires that the borrowers current principal and interest payment drop by at least 5%. For example, if an Irvine FHA borrower has an FHA loan with a P&I payment of $2,000, along with a mortgage insurance payment of $163, (combined $2,163), then the refinance would need to lower the borrowers payment by at least $108 per month.

It typically doesn’t take much of an interest rate drop to achieve a 5% payment drop. But FHA has increased the Annual Mortgage insurance premiums (used to calculate the monthly mortgage insurance payment) three times in the past 18 months. This meant that an FHA borrower, while dropping their rate, had an increase in the mortgage insurance payment which quite often offset the P&I drop. But now, with the new change, FHA borrowers who have “held out” and not refinanced yet, can refinance and dramatically lower their payment.

Important Things to Know About the FHA Streamline Refinance

• No Appraisal
• No Income Documentation
• Closing Costs are typically “credited” by the lender and cannot be added to the loan amount.
• At least one borrower must have a job.
• Some money will be needed for closing, but it is to cover the new impound account for taxes and insurance. The old impound account will be refunded after the close.
• Your final 30 days interest can be added to the loan balance. Some lenders call this “skipping” a payment, but in reality it is financing the payment, or least just the interest portion of the payment.

The first step in determining whether an FHA Streamline Refinance will be a benefit to you is to contact a local Orange County FHA Streamline Refinance loan officer who can prepare a detailed side by side analysis comparing your current loan to the new refinanced loan.

Orange County home owners who are underwater on their homes and unable to take advantage of low interest rates recently got some good news for a change. The revised Home Affordable Refinance Program, or HARP 2.0, will allow Orange County home owners to refinance even if they have no equity in their home. Even if they owe twice as much as their home is worth. Even if their Orange County property is a condo. Even if they no longer live in the home, but rent it out. And even if their credit FICO score is as low as 620.

Basic Credit Requirements an Orange County Home Owner must meet for a HARP Refinance

• Minimum FICO of 620
• Most recent 12 months mortgage payments must not have a 30 day mortgage late.
• Any delinquent property taxes, tax liens, judgement’s, etc must be satisfied prior to closing.

Previous versions of the HARP program included lower maximum loan to values, more Loan Level Pricing Adjustments, which had a negative affect on the interest rates and pricing being offered to a HARP borrower. With HARP 2.0, the LLPA’s are held to a maximum of .75 of a point. This means that even if you own  an investment property that is a condo, and your FICO score is 620, your new interest rate will barely be affected.

The monthly savings for most Orange County home owners who are able to refinance with the HARP program will be huge. For those choosing a new 30 year fixed rate loan, it will be easy to achieve monthly savings ranging anywhere from $300 to $500 per month for loans in the $300,000 to $400,000 range. But many HARP refinance borrowers are current choosing either a 20 year or 15 year fixed program. By choosing a 15 year fixed, the payment will most likely increase rather than go down. But with 15 year fixed rates in the low 3’, anyone whose goal is to pay their home off before they retire should seriously consider choosing a 15 year fixed.

The primary criteria for determining whether you can use the HARP program is that your loan must be owned by either Fannie Mae or Freddie Mac. Also, Fannie Mae or Freddie Mac must have bought the loan prior to May 31, 2009.

How Do I Find Out if Fannie Mae or Freddie Mac Own my Loan?

Fannie Mae and Freddie Mac have set up a search site to help homeowners determine whether their loan is a Fannie Mae or Freddie Mac. Loan. You can check them out by Googling Fannie Mae Lookup and Freddie Mac Lookup. (Or just click on the links.) But how do you know if your loan was purchased prior to May 31, 2009? You’ll need the help of an Orange County HARP Loan Officer. The figure it for sure, the HARP Loan Officer will need to complete a loan application run it through Desktop Underwriter (DU) or Loan Prospector (LP). DU is Fannie Mae’s automated underwriting engine, and LP is Freddie Mac’s automated underwriting engine. The Orange County HARP loan officer can also prepare a Side by Side Analysis of your current loan as it compares to a HARP refinance, comparing the different programs (30, 25, 20, and 15 year fixed).

For all those who have been left out of the low interest rate party, now is the best time in years to take advantage and start saving money.

VHAP II is New Castle County Vacant Home Buyer Assistance Program which is a Delaware down payment assistance program.  VHAP II is being launch on March 15, 2012 and is the first day New Castle County is accepting applications for the program.  VHAP is a loan for home buyers to purchase homes that have been vacant for at least 90 days.  The loan is for up to 6% of the sales price but capped at a maximum of $10,000.  This money can be used for down payment and/or closing costs.

If you would like to apply for the VHAP II Program or would like more information you can call preferred program lender at 302-703-0727 or you can APPLY ONLINE.

The New Castle County Vacant Home Buyer Assistance Program is not just for first time home buyers, the home just needs to be your primary residence and you must meet the income guidelines.  The total household income must be below the 120% median income which is shown in the table below:

Eligible Income Limitations for VHAP Program for 2012

Household size                      Maximum Income

1 Person                                               $67,550
2 Person                                               $77,200
3 Person                                               $86,850
4 Person                                               $96,500
5 Person                                              $104,200
6 Person                                              $111,900
7 Person                                              $119,650
8 Person                                              $127,350

The VHAP II is only available on properties that have been vacant for 90 days and are located in one of the following census tracs:
Census tracts: 103, 107, 139.02, 148.06, 148.08, 149.02, 149.03, 149.05, 152 and 163.03

John R. Thomas
Certified Mortgage Planner – NMLS 38783
Primary Residential Mortgage
248 E Chestnut Hill Rd
Newark, DE 19713
302-703-0727 Office
www.DelawareMortgageLoans.net
APPLY ONLINE NOW!!

Finally the HARP 2.0 refinance program is available in San Jose. Starting March 19, 2012, if you have an upside down mortgage or are underwater on your San Jose home, you could possibly refinance under the HARP program. There are several factors if you can qualify for the HARP 2.0 loan in San Jose. Your loan must be owned by Fannie Mae or Freddie Mac. If you don’t know, you can contact me and I will look it for you. You must be current on your mortgage with no late payments in the last 12 months, and as long as you have a 620 credit score or better, and haven’t refinanced since May 31, 2009, you can qualify for the HARP loan. Since banks will start accepting the applications on March 19th, we expect there to be a rush of applications, you it might be in your best interest to apply for your HARP 2.0 loan now

On February 1, 2012, the Obama Administration Announces Pilot Program to Help Rural Borrowers Refinance their USDA Mortgages to Get Lower Interest Rates in 19 states, including Rhode Island.

To be eligible under this pilot program:

• Borrowers must have made their mortgage payments on time for 12 consecutive months.
• Refinanced loans must be at rates 1% below the original interest rate.
• Terms cannot exceed 30 years.
• No cash out is permitted to the borrower.
• Borrowers must live in: Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Rhode Island, South Carolina and Tennessee.
• Borrowers must meet their county income requirements.

Some highlights of the new streamline pilot program include:

• Appraisal is no longer required to determine home value
• Credit report and score is not required
• Inspection reports are not required
• A .3%monthly mortgage insurance fee applies
• New Guaranteed fee of 1.5%
• Debt-to-income ratios are not calculated
• Employment must be verified

Call your RI USDA Mortgage Specialist today.

 

Lynda Mckenzie
RI license#137627/NMLS#137627
Direct:  401-524-9796
E-mail: lmckenzie@guaranteedrate.com
Web:  http://www.guaranteedrate.com/lyndamckenzie
RI Licensed- 20102682LL

USDA  just announced a new USDA streamline refinance pilot program expected to help LOTS of homeowners across Alabama, Georgia, Florida, Tennessee, South Carolina and 14 other states.

No income, no appraisal, no assets, no NOTHING! – That is the new USDA Streamline Refinance program.

So, how does the new rural housing refinance program work and how can you take advantage?

Rural Streamline Refinance Guidelines

1. The loan must be a USDA loan
2. The new interest rate must be a fixed rate 1% below your current rate. Due to recent mortgage insurance changes with USDA that added .30 in annual mortgage insurance, you’ll need at least a point to see enough savings.
3. USDA Streamline Refinance is only available on a 30 Year FIXED rate.
4. USDA Loan Balance – you cannot ADD to your loan balance. You will pay the closing costs or your lender will premium price your USDA Streamline refinance and pay them for you.
5. USDA mortgage insurance does apply. As of 2012, all USDA loans have an annual mortgage insurance rate of .30 of the loan balance.
6. No appraisal, no credit and no income documentation is required. Some USDA streamline refinance lenders MAY require a property inspection to ensure that the subject property still meets USDA guidelines.
7. USDA Streamline Refinance Pilot loans must be manually underwritten.
8. Closing costs, as with almost ALL mortgage loans including USDA refinances, are still applicable. There are still third parties that have to do their jobs. Title needs to be pulled, you need to sign the closing docs and loan officers still need to feed their families. You do, however, have closing cost options that include NOT having to pay ANYTHING for your USDA streamline refinance out of pocket

USDA Streamline – Closing Cost Options

Like I stated before, nothing is free. There are people that work and want to get paid for those services. I don’t care what you heard on the news, don’t be a sucker. HARP Refinances are no different, they also have closing costs. FHA Streamline Refinance loans do too.

Now that we have established USDA Streamline Refinances (Pilot Version) are going to have some closing costs. How do we pay the costs? Out of pocket? Rolled into the loan?

USDA Streamline – NO CLOSING COST

Most of my FHA Streamline borrowers prefer this option. I’ll bet that most people pursuing the USDA Streamline Refinance will too.

Basically, ALL no cost refinances work the same. The closing costs still exist and still have to be paid, only the LENDER will pay them for you. Why and how would the USDA streamline refinance lender do that? Through increased interest rate.

ALL NO COST REFINANCES, USDA STREAMLINE REFINANCE INCLUDED, COME WITH AN INCREASED INTEREST RATE.

Sorry to yell, but I wanted to be as clear as possible on how no cost refinances work. If a mortgage lender tells you different then you need to find another mortgage lender.

USDA Streamline – LOW Closing Costs

When you pursue your USDA refinance you should be able to check out multiple closing cost options. Along with a NO COST streamline, you will have low cost and full cost options.

Each USDA Streamline Refinance closing cost option should have a different interest rate. Higher the closing costs, lower rate. That’s how it works.

Check out all your options, low cost, no cost and full cost. Look at break even points on the costs and savings on each USDA Streamline refinance option.

Do Income and Geography Restrictions Apply for USDA Streamline Refinances?

Yes. USDA Streamline Refinance income guidelines still apply. USDA Streamline Refinance loans do NOT require you to be re-approved for geography. If you originally were in USDA territory then you will STILL be good, regardless of community growth.

Don’t have a USDA Loan? We have streamline refinance programs for Fannie / Freddie via a HARP Refinance and for FHA borrowers via a FHA Streamline Refinance.