Archive for February, 2010
FHA Mortgage Refinancing with No Equity
Posted by: | CommentsFHA offers loan programs for borrowers who need a FHA refinance loan but have no equity available because of the sluggish housing market. The FHA streamline refinance is great for the homeowner that has a wants a rate and term refinance. No cash out or debt consolidation is available with FHA streamline loans and certain restrictions do apply. To qualify for a FHA streamline, you must currently have a FHA mortgage that you are current on with no late payments in the last year. In late 2009, HUD made some changes to the FHA guidelines and a good payment history on your existing FHA loan is essential.
Let’s face it millions of homeowners owe more than their home is worth. Fannie Mae and Freddie Mac offer the Home Affordable Refinance Program and the DU Refinance Plus program that FHA allows you to refinance your mortgage without an appraisal (so the fact that your house’s value has dropped like a piano from the roof is irrelevant) if you meet certain guidelines.
The FHA streamline refinance has been surging in popularity with FHA lenders because it meets the needs of so many homeowners that are blessed with an FHA loan. FHA mortgage rates are as low as they have ever been and FHA loan companies have become much more efficient processing government refinance loans.
FHA Streamline Refinance Requirements
1. You have to have made at least six payments on your current FHA loan.
2. If you have had your FHA loan for less than 12 months, all the loan payments must have been made in a timely manner. If you have had the FHA mortgage for more than 12 months, you can have been late only once in the last year and must have paid on time the last 3 months.
3. Your new FHA loan payment must be at least 5% lower than your old payment, or you must be replacing an ARM with a fixed loan (the new FHA rate can’t be more than 2% higher) or hybrid loan (the new loan payment can’t be more than 20% higher), or reducing the term of your FHA loan, or reducing your interest rate by at least 2% (if replacing a fixed home loan with an ARM).
4. The property being refinanced must be your primary residence.
5. Closing costs for FHA streamline loans must be paid upfront (with the exception of mortgage insurance premium (MIP), which can be financed in the new loan.
Mortgage Rates on the Rise?
Posted by: | CommentsThe Federal Reserve has announced their intention to stop buying mortgage backed assets. The housing recovery is far from over, but the government believes that it is time to back off their aggressive stance to help stimulate the real estate market. Since the end of 2008, the Federal Reserve has been buying home loan securities and bundling the mortgages that are used to fund mortgage lending. In March, the Fed plans to complete its purchase of $1.25 trillion in mortgages, even though signs of a housing stability are nowhere to be found.
Most mortgage insiders have concluded that higher mortgage rates are on the horizon. But even if the Fed holds onto the mortgage loans it has already purchased, the act of no longer buying additional home mortgages is likely to increase mortgage rates in the coming weeks. Experts say a jump of at least a quarter to a half percentage point is likely. Mortgage refinancing activity continues to decline and home loan defaults have been reported at record levels.
San Francisco Federal Reserve President Janet Yellen warned of higher rates in a speech Monday. Fed Chairman Ben Bernanke is likely to take questions about the Fed’s mortgage program when he testifies about economic conditions on Capitol Hill Wednesday and Thursday.
The spread between the interest on 30-year fixed rate home loans and the benchmark 10-year Treasury note now stands at about 1.2 percentage points. Before the financial crisis, this spread was typically closer to 1.5 percentage points
To obtain the 30-year fixed-rate mortgage under 5%, borrowers would be required to pay an average 1.50 points. The 5/1 ARM looks good as borrowers can lock in at 4.25% with no points.
Mortgage Refinancing Benefits
Posted by: | CommentsMortgage refinancing can offer significant opportunities for homeowners to save money and get access to cash. Through home refinancing, it may be possible to reduce your monthly home loan payments and provide the ability for you to own your home outright quicker. Consider the peace of mind you obtain by refinancing an adjustable rate mortgage into a mortgage featuring a fixed interest rate. Many homeowners have benefitted from the debt consolidation option that is available with most cash out refinance loans. We recommend consolidating variable rate credit debt into a fixed rate home equity loan or mortgage.
- Record low rates starting at 4.625% fixed
- FHA refinance programs offer additional flexibility
- Choose from 30 and 40 Year fixed rate terms
