No Income Mortgage Refinance
By · CommentsOne of the most common questions I get submitted to me on the Natiowide website, is “How do qualify for a no income mortgage refinance?”
Stated income, no doc and no income verification loans were all very popular home loans a few years ago. What started as a convenience mortgage for self-employed borrowers turned into a popular choice for all types of borrowers because it was easy but for many people it enabled them to qualify for a loan that they reall could not afford. Brokers and lenders clearly pushed the envelope on no income mortgage loans over the last decade and the mortgage inustry is paying the price for all of the loan defaults and foreclosures right now.
Today the only know no income mortgage refinance option is the streamline loan. This popular government refinance loan is available with the VA streamline refinance and the FHA streamline refinance. These programs do verify employment, but at this time they are not verifying income. This refinancing loophole has helped thoussands of borrowers refinance even though their debt to income ratio was higher than the loan program allowed. For more infomation about the streamline loan program read the recently published article, The Streamline Refinance, the Best Kept Secret in the Mortgage Industry.
4 Tips for Refinancing a Mortgage
By · CommentsNext time you are refinancing a mortgage consider the following tips. When following the refinance advice outlined below you may be excited to uncover lower monthly payments while maximizing the lowest possible refinance rate.
1. Work with a Trusted Mortgage Lender – It is imperative that you work with a loan professional that you trust. If you need a VA mortgage, make sure that you work with an experieinced VA lender. If you need a FHA refinance, it’s in your best interest to allign yourself with a loan company that understands the FHA loan programs inside and out.
2. Shop for the Best Refinance Rate Online - Spend some time doing your due dilligence and compare quotes from competitive lenders. Strive for a no cost mortgage refinance loan, because it can save you thousands of dollars.
3. Beware of Mortgage Insurance – When refinancing a mortgage, almost a third of homeowner could pay a portion of their home equity to eliminate mortgage insurance. Borrowers don’t realize that FHA loans charge monthly mortgage insurance. If you have the ability to make some cost-effective home improvements, you may be able to get the value increased enough to wave good-bye to mortgage insurance. Another method homeowners do is to use your credit cards to pay down the balance of your mortgage with credit cards, but we don’t recommend increasing your revolving debt to get rid of mortgage insurance. But, if you are borrowing more than 80% of your home’s value, you will be hit with private mortgage insurance, costing you hundreds a year.
4. Ask About Lending Fees – Fees are a hidden cost of many mortgage loans. By law, lenders must disclose fees within three days of a loan application. Fees can go by many names like – document prep fees, courier fees, administrative fees, and more. When comparing home refinance loans online, request a list of fees from several lenders. Add these loan fees with the mortgage interest incurred. With these calculations, you may be surprised that the most cost-effective refinance did not have the lowest mortgage rate. Read more Mortgage Refinancing Tips
Fannie Mae DU Refinance Plus
By · CommentsFannie Mae introduced the DU Refinance Plus program in 2009 in an effort to extend refinancing relief to borrowers that lost their home equity in the housing crisis. With this Fannie Mae refinance program, borrowers who had a mortgage owned by Fannie Mae, could refinance their mortgage up to 105% loan to value.
Fannie Mae accomplished a few of their goals with the DU refinance plus program, but with home values declining further, Fannie Mae quickly found that 105% wasn’t enough as lenders still struggled to qualify borrowers with the DU Refinance Plus program. In an effort to stem the foreclosure crisis, Fannie Mae worked out a more agressive refinancing alternative with Freddie Mac. They called the program the Home Refinance Affordable Program and borrowers were able to refinance their first mortgage lien up to 125% loan to value. The Home Affordable Refinance Program was as introduced to supplement the reduced cost mortgage refinancing efforts that many of the lenders were extending to distressed homeowners. This program was warmly received as thousands of borrowers looked to to the Home Affordable Refinance for securing them a lower mortgage payment.
The Fannie Mae refinance loans have made a positive impact on reducing foreclosures, but the Obama administration wanted to go a step further. Emergency Homeowner Loan Program is set to roll out in September and this FHA short refinance loan will actually write down the mortgage balances to the fair market value.
Only a small percentage of loan professionals understand the streamline refinance guidelines and therefore there is a lot of misinformation about the VA and FHA streamline. Streamline rates range from 3.75% to 4.375%, so if you like cheap money with low mortgage rates, the streamline refinance is worth considering.
Loan originators are always looking for lending loopholes that will give them an edge over their competition’s loan programs. With only a few loan programs in today’s tight lending environment it can get frustrating for loan companies to carve out a niche. As with many industries, knowledge is power and loan officers that learn their guidelines backwards and forwards for VA and FHA loan programs truly are a few steps ahead of their competition. Not only does loan product knowledge earn you credibility with your borrower, but it actually enables you to get your clients qualified for a loan they would normally not be eligible for. Both VA and FHA mortgages have a loophole with the streamline refinance. If your clients already have a FHA or VA mortgage and they are having trouble qualifying for conventional refinancing because of credit, equity or income, then the streamline loan program may be the solution your client needs to qualify for a house refinance that saves them money while protecting them from foreclosure.
Streamline Refinance Great Solution for Qualifying VA and FHA Borrowers
FHA and VA home loans do not have minimum credit scores requirements from the agencies however; most government lenders have instituted their own credit score minimum in an effort to ensure the mortgage originated can be insured. The streamline refinance programs are available with both government loan products VA and FHA. To qualify for a streamline refinance, borrowers must already have a government mortgage (FHA or VA mortgage) and are seeking a rate and term refinance. Many of the VA mortgage lenders today have extended a unique refinancing opportunity with the VA streamline that require no minimum credit score.
Streamline Refinance Loan Highlights
- No Minimum Credit Score with FHA Streamlines
- VA Streamline Refinance with No Credit Score Requirements
- 12 Month Mortgage History is required.
- No Income Verification with Streamlines
- Skip Mortgage Payments when Streamline Refinancing
Getting Approved for Mortgage Refinancing Is Challenging
By · Comments2010 may be remembered as the year for the lowest mortgage rates that hardly anyone qualified for. If you meet the lending guidelines, then this may be the best mortgage refinancing time. Unfortunately, with high unemployment and tighter lending requirements, a vast majority of homeowners are unable to qualify for a refinance loan. The Federal Reserve has made significant efforts to stimulate the economy by keeping the interest rates at record lows. At some point the Fed will have to correct the market and begin hiking key interest rates. In years past, when mortgage rates fell, millions of homeowners would rush to refinance their home loan.
Get a Free Refinance Quote with No Obligation!
The Lead Planet, a mortgage lead generation company reported that refinance leads had steadily risen over the last few months. Even the Mortgage Bankers Association reported that home refinance applications spiked in recent weeks as interest rates dipped to record lows consecutively. MBA said that the refinance boom in 2003 experienced a much higher volume of refinance applications.
Freddie Mac indicated last week that the average rate on a 30-year fixed rate loans below $417,000 fell to 4.42% with an average 0.7 point. That was down from 4.44% the previous week and from 5.12% at this time last year. Rates are about one-eighth of a point higher on loans between $417,000 and $729,500. In most cases to get approved for these low conventional mortgage rates, a borrower today must have a FICO score of 720 or higher, a loan-to-value ratio of 80 percent or less and at least two years of fully documented income. However the government mortgage rates are just as low and the guidelines are more forgiving on credit with VA and FHA home loan options.
Refinancing Your Mortgage in this Economy
By · CommentsWhen rates are at record lows, refinancing your mortgage is likely a wise decision. The process for mortgage loan refinancing has been automated in recent years, however meeting the refinance guidelines has proved to be challenging for most homeowners in 2010. Do you qualify for the best mortgage refinance programs? Does your current mortgage have a pre-payment penalty for early pay off or refinancing? Does your credit score meet the lender requirements for home refinancing? These are all important questions to consider prior to shopping for a refinance loan.
Another reality is that mortgage refinancing with bad credit is very difficult. However both VA and FHA refinance loans are possible for borrowers that can demonstrate strong compensating factors. Many borrowers have strayed away from conventional loans in favor of FHA mortgage refinance solutions.
Mortgage Loan Refinancing Activity Rises 17%
The Mortgage Bankers Association reported yesterday that while interest rates remained the same this past week, home refinancing activity spiked up 17%. With the housing market stalled, nearly all the action in the mortgage market is in refinancing. Less than 20% of mortgage applications were for home purchases, for the week ending August 13the, the MBA reported. The survey covers more than half of U.S. retail residential mortgage applications.
Last week, the Wall Street Journal reported that low home loan rates appeared to be stimulating a significant increase in home refinancing. Many insiders believe that reduced lending fees and no cost refinancing options may have played a role in the increased refinance applications online.
Home loan relief is becoming more controversial as the Obama administration continues to make moves to forgive mortgage debt with short refinancing initiatives that will write-down home loans for homeowners that find themselves stuck with underwater mortgages. Republicans and Democrats alike are complaining that Obama is trying to buy votes with debt forgiveness.
With home mortgage rates at the lowest point since Freddie Mac began tracking interest rates, what more can the Federal Reserve do? The Fed has little power left to lift the economy out of its rut. Congress, with an election looming, has no appetite for more stimulus. Typically, the Fed can lower home loan rates in an effort to stimulate consumer spending in hopes that it will invigorate the economy. But the benchmark interest rate controlled by the Fed has been almost zero percent for more than a year now.
The Obama administration already funded the Home Affordable Refinance Program that enabled mortgage refinancing to 125% on select Fannie Mae and Freddie Mac mortgage portfolios in an effort to combat the highly deflated home values that have prevented many Americans from being approved to refinance into a more affordable fixed mortgage payment.
| Eligibility for the HARP home loan relief was difficult and not enough homeowners met the requirements set forth to refinance their underwater mortgages.In a recent article, Deutsche Bank indicated that there may be 20 million underwater mortgage loans that are outstanding by the end of 2011. This puts a significant amount of pressure on homeowners that are already struggling with high unemployment and tighter loan guidelines. |  |
Now the government has given HUD the authority to approve an FHA short refinance option that actually reduces the principal mortgage balances. FHA insures home mortgages, but the agency has nearly used their emergency loan reserves. Who do you think is paying for this? – - Yes the U.S. tax payers will be picking up the tab on this mortgage bail-out initiative as well. And if that’s not enough risk for the government, they also agreed to another mortgage relief initiative with the Emergency Homeowner Loan Program that is designed to help self-employed and un-employed homeowners for six months.
The Fed announced this week they it would use the proceeds from its huge portfolio of mortgage securities to buy government debt. The idea is to make cheap credit even more affordable, particularly for things like mortgage loans. The problem is that Americans who are worried about job stability, not to mention volatility in the stock market, don’t want to borrow. They saved 6.2% of their disposable income this spring.
Sure, the Federal Reserve still has options. It could launch another trillion-plus-dollar program to buy government debt or mortgage securities like it did when it was battling the recession and financial crisis. But the Fed is unlikely to commit that much money unless things get a lot worse. Plus there are risks. Regulators are resistant to push interest rates on low rate home loans because they don’t want to artificially jump-start the housing sector like what happened that inflated the housing bubble. The Fed could slash the rate it pays banks to zero in an effort to keep money parked there, a move aimed at getting banks to lend more, but banks are not exactly feeling cash-rich, either.
As reported previously, home mortgage rates have fallen to record lows. 15-year mortgage rates fell to 3.92 % this week and rates on 30-year mortgage loans were published at 4.44 %. Still, consumers aren’t in a mad rush to purchase homes and most homeowners are unable to meet the tighter guidelines for FHA refinancing. HUD is considering implementing a minimum credit score and FHA guidelines may start requiring these higher risk borrower to put as much as 10% up for down-payments in an effort to stem foreclosures and loan defaults. Many mortgage lenders believe that if the loan requirements were loosened for a period to get the distressed homeowners approved for refinance loans or loan modifications that our housing sectors will rebound locally and nationally.