1.  Before  you celebrate, make sure you qualify. Getting a pre-approval solicitation in the mail does not count.  You need a loan approval from the lender signed by the underwriter who has the authoority for the type of loan you using to refinance.  The current refinancing guidelines for FHA, VA anc conventional all require income documentation that proves your debt to income ratio is low enough to qualify.

2. Do the Math!  When considering the best mortgage refinance options you must calculate the savings monthly and then factor in the years you are adding on the loan.  Take your existing mortgage payment and multiply it by the number of months you have left.  Do the same thing with the proposed refinance loan. If the calculator indicates that the new loan will cost you more over the term of the loan, you better think twice and make sure that the monthly saving justify the long term costs.  If you absolutely can’t afford your current payment or if you are planning to move in the next 12-18 months than the long-term saving may not matter.

3. Compare Mortgage Refinance Lenders! You may have a favorite loan officer, but make him or her earn your business each time you do a loan.  In most cases if you let the loan officer know that they are in a competitive situation, they will usually go the “extra mile” to reduce the lending fees and get you approved for the lowest possible mortgage refinance rate.  Don’t forget to find out if you qualify for a no cost mortgage refinance.

Mortgage refinance rates may be at an all-time low, but if you think before you sign and consult with financial advisors you trust, then you just may uncover new opportunities to save yourself thousands of dollars over the life of the loan.  It’s your time and your money, so choose your mortgage refinance lender wisely!

FHA Mortgage Rates Are Prime for Mortgage Refinancing

FHA loan programs remain more flexible than conforming home loans because the conventional guidelines have been tightened significantly more for borrowers seeking low rate mortgage refinancing solutions. FHA approves mortgage refinancing of up to 97.5% loan-to-value for qualified borrowers.  With FHA refinancing, borrowers must always document their income, but these days’ conventional loan programs have eliminated stated income and no income refinancing programs any way.

Mortgage refinance rates are at record lows and homeowners that do qualify can benefit from a fixed rate mortgage that will reduce their monthly payment and eliminate years of compounding interest. There is also an opportunity for millions of homeowners to escape the fear of their adjustable rate home loans.  Al Pereida, the branch manager for iServe Lending in Irvine, California said, “Homeowners should not pass up these opportunities to lock in fixed rate mortgages below 5%.”

Listed below are the Top 5 Mortgage Refinance Loans in 2010:

1.  FHA Refinance Loan – This is the most common refinance loan for homeowners this year, because FHA doesn’t require much equity and the credit score requirements are not as stringent as conventional lending guidelines.  Low credit scores and lack of equity are the biggest obstacles for homeowners in this market.

2.  VA Streamline Refinance – This is the most cost effective refinance loan available this year, but you must have VA loan eligibility.  The VA refinance overlooks the lack of equity because there is no appraisal needed for the VA streamline program.

3.  No Cost Mortgage Refinance – Refinancing into a low rate mortgage with no points and no fees is a great option for borrowers with good credit scores and worthy income documentation.

4.  Loan Modification – This is technically not a refinance loan, but it accomplishes the same goal of achieving a lower monthly payment.  Millions of distressed homeowners find themselves being rejected by lenders because they do not meet the tighter mortgage refinance guidelines. 

5.  Cash Out Refinance – Home equity loans have nearly vanished so the cash out refinance has remained a popular choice for home improvement financing and debt consolidation. FHA refinance loans allow 85% cash out.  VA refinancing guidelines allow 90% cash out and most conventional lenders limit cash out to 80%.

Below, we listed the best mortgage refinance loans so you can have a better idea on what is out there before you begin shopping lenders online:

FHA Mortgage Refinance – The most popular refinance loan this year because it is flexible with credit and not much equity is required.  The FHA streamline does not allow you to finance closing costs anymore, so we suggest sticking with the traditional FHA refinance loan because rates are available below 5% with no pre-payment penalties.  FHA allows cash out to 85% loan-to-value.

Conventional Refinance – This is a great refinance loan for borrowers with credit scores above 700 and at least 20% home equity.  There is no private mortgage insurance like FHA loans, so you will get the best of both worlds.  Most conventional lenders will allow cash refinancing to 80% LTV.

VA Mortgage Refinance – If you are active in the Military or a retired veteran you will love the VA refinance opportunities.  VA offers the VA streamline refinance that allows borrowers who already have a VA mortgage to refinance with reduced lending fees.  No appraisal is required, so you save money and do not need to have any equity.  No other lending program allows you to go above 100% loan to value and required no appraisal.  VA enables cash out refinancing to 90%. The VA mortgage refinance program will even allow you to skip a payment.

Whichever mortgage refinance loan you choose, know that you are locking into the lowest fixed rates seen in a generation.  Contact Nationwide for a free rate quote and refinance analysis with no obligation.

First of all, if you have the opportunity to save money with a fixed rate while interest rates are at all-time lows, you should jump for the opportunity and move forward.  Although mortgage interest rates are extremely low today, it is very difficult to qualify for mortgage refinancing, because lenders have tightened guidelines significantly in an effort to minimize loan defaults and foreclosures.  Just because you qualify today does not always mean that you will qualify to refinance tomorrow.  For example, What if you are approved for a FHA mortgage at 96% loan-to-value now and FHA changes the guidelines to 95%?  What if there were several foreclosures on your street that brings your value down so that your loan to value balloons to over 100%?  These are both real reason why borrowers don’t qualify for a refinance loan that they once were approved for.

To answer your second question, I must understand your big picture first.
1. Do you plan on selling your home or moving any time soon? No, we would like to retire in this home.
2. What is the balance on your first mortgage? $385,000
3. What is your home’s appraised value? $495,000
4. Do you have a second mortgage and if so did you want to refinance the second mortgage with the new loan? No second mortgage
5. Have the lenders ran your credit and sent you loan disclosures with a Good Faith Estimate? Yes, we have 739 middle fico score and believe it or not we received loan disclosures from both loan companies.

Lender Recommendation: First of all I would recommend rather than going straight for a FHA loan that you get a quote for a conventional mortgage backed by Fannie Mae or Freddie Mac. FHA loans are great but you are below 78% LTV and you qualify for a prime rate loan with no mortgage insurance.  Unless you get a 15-year loan, FHA guidelines requires that you pay a mortgage insurance premium when you close the loan, in addition to a monthly insurance charge.  In your case that would save you over $100 a month by choosing a loan backed by Fannie or Freddie.  Regarding which refinance option to choose — While the no cost mortgage refinance is appealing but if you keep this loan for the life of the term you would save money by paying the $3,000 in closing cost and go with the lower rate option.  These are great refinance options and you could not go wrong with either mortgage loan.  Mortgage refinance rates are at record lows so the chances of interest rates improving are slim.  It certainly is not worth the risk of refinance rates rising, because there will be a time when they go up and do not come down…

Today second mortgages are hard to find.  First mortgage refinancing is back in style again. Very few traditional lenders are offering home equity loans or credit lines because of the credit crunch and the high default rate of second mortgage liens over the last four years.  It is unfortunate because thousands of borrowers are looking for second mortgage refinancing, because they got stuck with an adjustable rate HELOC.  Refinancing these 2nd mortgages into a fixed interest rate makes sense financially.  If you have a little bit of equity we recommend refinancing your 1^st and 2^nd mortgage together with a FHA mortgage. The government loans enable borrowers to get cash out with refinance loans at 85 to 95% loan to value.

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.

• Record low rates starting at 4.625% fixed
• FHA refinance programs offer additional flexibility
• Choose from 30 and 40 Year fixed rate terms

Our mortgage refinance team offers a free consultation that usually reveals the best solution based your financial needs, goals and lending qualifications. Our experienced loan professionals can help you understand the details and differences between conventional and FHA mortgage loans.  If you are considering a cash out or FHA streamline refinance, we will help you review the FHA requirements for mortgage refinancing.

A second mortgage provides you the ability to eliminate your variable rate 2^nd mortgage into a fixed rate mortgage with more stable terms. In most cases, refinancing adjustable rate loans and HELOC’s will save you thousands of dollars a year in interest by converting the compounded interest to a simple interest loan.  If you are considering mortgage refinancing and want to get cash out with a FHA mortgage that lets you to borrow up to 95% of LTV.  Take advantage record low rates and refinance your second mortgage and enjoy the financial benefits.