By: Doug Bullwinkel
I keep reading articles about how difficult it is to refinance a home mortgage in today’sLenderSolutions.com lending environment and I ask myself, “Why aren’t more people getting the word about the availability of the current loan programs”.
More opportunities exist today than ever before if you’re looking to refinance your home. For those who have played by the rules, made their payments on time and kept their credit clear, there are several great options available for refinancing at today’s low rates.
EXISTING VA LOANS are eligible for a Streamline Rate Reduction Refinance Loan Program. If you have an existing VA loan on your home, you are probably eligible for a limited documentation refinance with NO appraisal required in many cases. For most loans, we just verify assets and get a credit report and a mortgage rating for the past 12 months to confirm there are no 30 day mortgage lates. If you have a current second loan, that will have to stay in second place as this is NOT a cash out loan.
NEW VA LOANS FOR CASH OUT If you do need cash out, a New VA loan will work fine. Just remember a pest control clearance is required for new VA loans, including cash out refinances. Full income, asset and credit verification is required for this program. Closing costs may be included in the new loan amount.
EXISTING FHA LOANS (3 choices)
STREAMLINE FHA refinance loans do not require a new appraisal but you cannot have more than one 30 day late on your current FHA Home Mortgage in the past 12 months. Minimum credit scores apply and some income and asset documentation may be required. Just like the streamline VA loan, this can only be used to refinance your existing FHA loan and if you have a second loan, that would have to stay in second place.
REGULAR FHA refinances, including paying off an existing second loan is based on the new appraised value, subject to credit and income qualification. This will be a full documentation loan, just like when you purchased your home. Your existing loan does not have to be an FHA loan for the full documentation program.
CASH OUT FHA REFINANCE loans are based on the new appraised value and your existing loan does not have to be an FHA loan. Full documentation on this with credit, income and appraisal requirements.
FOR LOANS THAT ARE CURRENTLY OWNED BY FANNIE MAE OR FREDDIE MAC that were originated prior to May 31, 2009. This just released refinance program is HARP 2 targeted towards homeowners that are “upside down” on their property values, but have maintained their credit and their mortgage payments on time. The guidelines will not allow any 30 day mortgage lates in the last 6 months and not more than one 30 day mortgage late in the past 12 months. In most cases (estimated at around 70% of applications) an appraisal will not be required. There is no ceiling on the loan percentage to value of the property on this program. If your existing loan did not have PMI or Mortgage Insurance, your new loan, regardless of loan to value, will NOT be required to have PMI. Conforming loan limits and Temporary HIGH LIMIT loans will be eligible, with those maximum loan amounts being determined by current county limits. This can be used for your primary residence, a second home or an investment (rental) property, however there will be a higher pricing for rental homes. To determine if your loan is currently owned by Fannie Mae or Freddie Mac, go to: www.LenderSolutions.com, click the HARP 2 LINK, and then go to the lookup links to check your property address for eligibility. Call me for pricing as interest rates will be changing daily.
EXISTING USDA LOANS
USDA STREAMLINE REFINANCE program is available but only if you currently have a USDA loan. No appraisal required and limited income documentation and credit requirements. No more than one 30 day mortgage late payment is allowed over the past 12 months. This streamline refinance is only for your USDA first mortgage loan and will not allow cash out.
Rate and term refinances are for refinancing current home loans with some equity above the current loan amount. For homes that have loan amounts above the appraised value (upside show) see HARP 2.0 for details.
CASH OUT REFINANCE on standard loan program programs cash out. All conventional loans require full credit, income, asset and appraisal verification, with the exception of HARP 2.0
CREDIT ISSUES AREN’T FOREVER
For those that have been late on their payments, but are recovering their credit stability, you may be able to qualify for a new loan much more quickly than you think. Time heals many things, especially your credit score. When those late payments are behind you and things are back to normal, you may be surprised how quickly you may be eligible for several of these programs. Even purchasing a home with a minimum down payment can be possible much sooner than you think. It’s time to get working on this NOW so that you don’t miss the boat. Mortgage Interest Rates will not stay this low for much longer.
As you can see, there is a virtual buffet of loan programs targeted at homeowners that have. Thumbs up been current on their payments. Why do I keep hearing “There is NO PROGRAM for those of us that have done everything by the rules and made our payments on time.” Well now you know that there are options and some of these may NOT REQUIRE A NEW APPRAISAL or equity in your home. You may be required to bring in a bit of cash to start your new impound or escrow account, but a refund from your existing loans escrow amount may be coming back to you soon after closing.
There’s NO EXCUSE to not take action on this immediately. If you currently have one of the above loan programs, you can start saving money NOW! Call your favorite mortgage bank or mortgage broker and get your application completed and your interest rate locked. Put a smile on your face when you find out just what refinancing your loan could accomplish. Think of all the wonderful things you can do with the savings.