While much of the recent news has focused on the new HARP refinance program for borrowers who have conventional mortgages, there are still other programs for homeowners who do not fall into these categories. Specifically, the FHA and VA both have Streamline refinance programs for borrowers. Both of these programs are excellent loan programs that provide for a simplified refinance program, even for borrowers who may owe more than their homes are worth.
FHA Streamline Refinance: The FHA streamline refinance is a program that allows homeowners who currently have an FHA home loan to refinance into a new FHA loan with a lower interest rate. The program does not have any appraisal or income requirements, but does require that the homeowner be current on their existing FHA mortgage. With mortgage insurance for FHA loans set to rise on April 1st, if you have an interest rate above 4.5% on an FHA loan, then you may want to look right away to see if this program can help you save you money in the short and long term.
VA Streamline (Irrl) Refinance: The VA streamline refinance is actually known at the VA Irrl program and it allows homeowners who currently have an VA home loan to refinance into a new VA loan with a lower interest rate. Like the FHA program, this program does not have any appraisal or income requirements, but does require that the homeowner be current on their existing VA mortgage. Again, if you have an interest rate above 4.5% on an VA loan, then you may want to look right away to see if this program can help you save you money in the short and long term.
As always it makes sense to speak to a licensed mortgage lender, such as Strategic Mortgage, about current home loan options and to see if an FHA or VA Streamline refinance is the right choice for you.
For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
In recent weeks, we have focused on the HARP refinance program as a refinance tool for homeowners who are upside down on their homes. And it is in fact a great program for borrowers who are upside down to refinance and take advantage of today’s historically low interest rates. However, for homeowners who are not upside down on their homes, the HARP program also can offer benefits as well.
Benefit #1- Appraisal Waivers: Traditionally, when refinancing a conventional loan, you needed to have an appraisal done on your home. In today’s market, this is an added expense and hassle in the refinance process and often times the numbers on appraisals are very conservative. Even if you have equity in your home, a HARP refinance can allow you to refinance and potentially receive an appraisal waiver, lowering the total cost to refinance and providing a quicker and easier process.
Benefit #2 – No Mortgage Insurance: On a conventional home loan refinance, if you owe more than 80% of the value of your home on a first mortgage, then you have to obtain mortgage insurance on your home loan. For many homeowners who at one point, put 20% down to purchase a home and have now seen home values drop, they can no longer refinance without having to contend with mortgage insurance. With the HARP refinance program, that is no longer the case. If you over 80% of the value of your home, you do not need to obtain mortgage insurance and so you can lower your interest rate without having to add costly mortgage insurance to your loan.
These are two major benefits to think about refinancing through the HARP program, even if you are not upside down.
As always it makes sense to speak to a licensed mortgage lender, such as Strategic Mortgage, about current home loan options. In future weeks, we will continue to provide additional updates on the HARP 2.0 program as they become available.
For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
HUD recently announced changes to once again raise mortgage insurance for FHA Home Loans starting on April 1, 2012. These latest changes mark yet another increase in the cost for FHA home loans, a trend that started in 2011 with a restructuring of the mortgage insurance premiums for these types of loans.
Starting on April 1, 2012, the upfront mortgage insurance for new FHA mortgages will rise from the current level of 1% to 1.75%. This will apply to FHA loans with an FHA case number on or after this point and will make the initial cost of getting an FHA loan more expensive. For instance, on a $200,000 loan, the upfront mortgage insurance costs currently are $2,000, but on that same loan, this cost will rise to $3,500 come April 1st.
In addition, there are more changes potentially to FHA mortgages that have not yet been finalized, but are under heavy consideration. Under these additional changes, on June 1, 2012, the monthly FHA mortgage insurance could rise an additional 10 basis points from the current level. What that would mean is that the monthly mortgage insurance could rise from the current 1.15% to 1.25% on loans with a 95% loan to value or higher ratio and from the current 1.1% to 1.2% on loans with a loan to value below 95%.
Furthermore, FHA is also considering reducing the total percentage of seller concessions to a buyer, from the current level of 6% to 3% on purchases, but this has not been finalized yet either.
The bottom line is that once again FHA mortgages are getting more expensive for most borrowers. If you are looking to purchase a home and use an FHA mortgage, keep in mind the April 1st date of the mortgage insurance hikes. While if you currently have an FHA loan and have been thinking about completing a refinance of your loan, the time to act again is sooner rather than later to avoid paying a more expensive price for your loan.
For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
In recent weeks, we have focused on the HARP refinance program as a refinance tool for homeowners who are upside down on their homes. And it is in fact a great program for borrowers who are upside down to refinance and take advantage of today’s historically low interest rates. However, for homeowners who are not upside down on their homes, the HARP program also can offer benefits as well.
Benefit #1- Appraisal Waivers: Traditionally, when refinancing a conventional loan, you needed to have an appraisal done on your home. In today’s market, this is an added expense and hassle in the refinance process and often times the numbers on appraisals are very conservative. Even if you have equity in your home, a HARP refinance can allow you to refinance and potentially receive an appraisal waiver, lowering the total cost to refinance and providing a quicker and easier process.
Benefit #2 – No Mortgage Insurance: On a conventional home loan refinance, if you owe more than 80% of the value of your home on a first mortgage, then you have to obtain mortgage insurance on your home loan. For many homeowners who at one point, put 20% down to purchase a home and have now seen home values drop, they can no longer refinance without having to contend with mortgage insurance. With the HARP refinance program, that is no longer the case. If you over 80% of the value of your home, you do not need to obtain mortgage insurance and so you can lower your interest rate without having to add costly mortgage insurance to your loan.
These are two major benefits to think about refinancing through the HARP program, even if you are not upside down.
As always it makes sense to speak to a licensed mortgage lender, such as Strategic Mortgage, about current home loan options. In future weeks, we will continue to provide additional updates on the HARP 2.0 program as they become available.
For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
As we wrote about in recent months, the HARP refinance program has now been expanded to allow more homeowners the option to refinance and take advantage of historically low interest rates. The program is a government backed initiative to allow borrowers who could previously not refinance, due to lack of equity or being upside down in their homes, to now do so.
HARP 2.0 is now set to officially become available to borrowers who have loans that are serviced by Fannie Mae and Freddie Mac, with no restrictions on value. In other words, the current appraised value of your home will not disqualify you from refinancing, regardless of value.
In recent weeks we have covered some basic information about the program and last week we started by answering some common questions about the program. This week, we continue with some more questions and answers.
Question #1: Can I refinance more than one property with the HARP program, if I own multiple homes?
Answer: Yes, you can refinance multiple homes with the HARP program, if you own more than one home. As we covered last week, the HARP program is available for borrowers, regardless of whether they do live in a home or use it as a second home or own it as an investment home. However, it is worth noting that once you refinance once using the HARP program, you cannot refinance the same loan again through the HARP program.
Question #2: What types of loan programs will be available for the refinance of my home through HARP?
Answer: The loan options for the HARP refinance program will be limited to 30 year and 15 year fixed mortgages. With interest rates at all time levels however, it doesn’t make much sense than to lock into one of these two programs anyway, as there are not tremendous benefits to be had in the current marketplace in adjustable rate loans. Interest rates are low now and may be for a little bit still, but inevitably they will rise, when that happens, you want to be protected with a fixed rate.
Question #3: What if my loan is not owned by Fannie Mae or Freddie Mac, what options do I have then?
Answer: While it is not common, we have seen instances where a homeowner’s property has not shown up as a Fannie Mae or Freddie Mac owned loan online, but upon calling into your existing loan servicer, the loan has been verified as being owned by one of the two. So, if the loan does not show up as owned by either, a phone call to your existing loan servicer may be a good option to make sure it is owned by Fannie Mae or Freddie Mac.
In addition, if your loan is perhaps an FHA or VA loan, there are also already existing streamline refinance options that may be available to you as well to lower your current interest rate and mortgage payments as well. So it is advisable to speak to a lender about those options as well.
If you do not fall into any of these categories, then the options are limited, but work is being done now to see if another refinance program can be established for privately owned loans, through government assistance and as this information becomes available, we will of course provide this as well.
As always it makes sense to speak to a lender about current home loan options and it is always advisable to speak with a licensed mortgage lender, such as Strategic Mortgage. In future weeks, we will continue to provide additional updates on the HARP 2.0 program.
For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
Strategic Mortgage is a mortgage brokerage based in Tempe, Arizona.
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