2012 FHA Loan Limits
By · CommentsBack in 2008, in an effort to make up for the lack of bank lending, Congress temporarily increased loan limits. Raising these loan limits lead to lower interest rates, better refinancing opportunities, and allowed people living in high cost areas to avoid higher cost loans that led to the economic downturn. A recent National Association of Home Builders study found that if the limits are allowed to return to 2008 levels, millions of house would have to be financed with home loans that required higher rates and more money for down payments.
FHA mortgage limits will now limit refinance loan activity in addition to first time buyers looking to finance houses with only a 3.5% down-payment in high cost areas. Many struggling homeowners do not have enough equity to qualify for conventional refinancing, so it will be a blow for this pool of borrowers not to have access to FHA refinancing. Many of these borrowers will need mortgage help or modifications if the refinance opportunities are gone. Just how long will lenders and banks be offering mortgage relief? Nobody knows for sure, but if you are being hurt by the lower 2012 FHA loan limits, then we recommend calling and writing your local congressman.
Secrets to Refinancing a High Rate 2nd Mortgage
By · CommentsMake sure you have good credit if you want to get a refinance loan with another equity loan rather than try to roll your second lien into a new first mortgage that has a lower rate that is fixed. Prior to 2nd mortgage refinancing, it is a good idea to take a good look at your finances. There is wisdom in the decision to refinance a second mortgage that have a high interest rate or to refinance adjustable rate credit lines, so wisdom should be applied in getting your credit in order prior to the application process.
Solutions for a 2nd Mortgage Refinance
2nd mortgage refinancing can create a chance for you to pay off all your debt faster if you plan properly. Choosing to refinance adjustable rate credit lines or refinance 2nd mortgages that have a high interest rate can lower interest rates and monthly payments. You should try to roll your second mortgage into a new first mortgage that has a lower rate that is fixed to facilitate paying down the principal by adding a little (or a lot) extra each month to your payment. If you can’t roll them together because of a lack of home value, make sure you have good credit if you want to refinance the 2nd loan with another home equity mortgage.
When you refinance adjustable rate credit lines through mortgage rate refinancing, you can drastically lower your monthly bills. When you refinance 2nd mortgages that have a high interest rate, the same result can occur. For the best results, try to roll your second mortgage into a new first mortgage that has a lower rate that is fixed. For the second best option, make sure you have good credit if you want to refinance the 2nd mortgage with another subordinate financing solution.
Should I Take Money Out By Refinancing My Home?
By · CommentsSome homeowners have accumulated a ton of debt from credit cards and car loans. If the amount of your debt payments is overwhelming you, using a refinance to get money makes sense. It will help you consolidate your debts into a single payment that is lower than what you are paying now. You will be in a better financial position in this situation. However, it comes with a big caveat. Many take the opportunity to clear their slate with cash refinancing. However, if you go back to spending money like crazy, you are defeating the purpose.
A medical emergency is another reason. Some people find themselves in a situation where they need cash in hand to pay for a critical medical procedure. Medical insurance will cover only certain procedures. In addition, even with insurance, there can be large co-pays and coinsurance requirements that can overwhelm you easily in the financial arena. Using a cash out refinance is one way to clear up that cash deficit. Now, a plastic surgery procedure usually does not qualify as a medical emergency, but again it is completely up to you.
Look at the reality of taking out a fixed rate 30-year mortgage on a short term purchase. Do you want to pay for the next thirty years on a vacation you take and forget about? Do you want to pay for that high end sports car for thirty years but only drive for maybe three or four years? Use a cash out refinancing for the right reasons. It is the responsible thing to do with your mortgage and for your financial future. You can make a real difference in your present financial position with a cash refinancing. However, make sure you do not end up in the same position again. You will not be a happy person.
Should I Get a Fixed Rate 30-Year Mortgage?
By · CommentsHere are some of the advantages to consider with a fixed rate 30-year mortgage:
- The interest rate remains constant. If you fix your mortgage rates at the lowest fixed 30-year mortgage rates in decades, you will have the same rate for the life of the loan. That means you are not going to see a minor rate adjustment on an ARM loan make your payments outrageous.
- Payments remain constant. When interest rates start rising, it becomes difficult to refinance an adjustable rate mortgage. Borrowers will start seeing, their mortgage rates start going up. Let’s look at an example. A mortgage of $300,000 with an initial mortgage rate of 4%, you will have a payment of $1,432.25 per month. If that rate goes up to 6.5%, the payment goes up to $1896.20. If the rate goes up to 9%, the payment goes up to $2,413.86. If you got a fixed rate 30-year mortgage at 6%, the payments would be $1798.65 with no chance of adjustment.
- Budgeting is easier. You have a fixed payment. You know that each month for the next 30 years. You will need to pay $X. As your income increases over time, that amount stays the same. You can use the extra income to save for retirement or to pay down the principal on your mortgage. The choice is completely up to you.
- A fixed rate 30-year mortgage allows you to weather rate changes with grace. One of the biggest problems in recent real estate troubles is the adjustable mortgage rates that started going up. A single percentage rate chance can make your payments jump quickly. With a 30-year mortgage refinance, that is never a concern. Your neighbors will sweat while you smile and shake your head.
These are a few of the advantages of a 30-year fixed rate mortgage refinancing. With that fixed payment amount, you will only need to adjust payments as your escrow changes. Your principal and interest will remain the same. You can pay the loan ahead with extra money you get. However, you will never have to scramble to make a mortgage payment that just jumped by a couple hundred dollars a month.
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11 Steps to Help the Housing Market Rebound in 2012
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Yesterday, the Federal Reserve committed to keeping the key rates at nearly zero for another two years. In an effort to keep borrowing attractive, the Fed has extended additional measures buy committing to buy bad credit mortgage bundles from the big banks like Bank of America, Chase and Citibank. As the stock market goes up and down like a roller-coaster and foreclosures continue to pile up, there are very few reasons to be bullish about the real estate market in any of the 50 states. There are measures that could be taken if we were serious about putting the housing crisis to rest.
Below are 11 Bold Suggestions for Overcoming this Housing Mess
- Obama and the Republican Presidential Candidate should commit to eliminating the capital gains tax. This will spur investing and stimulate the job market and reduce the unemployment rate nationally.
- The Federal Reserve needs to stop printing money. Devaluing the dollar is not enhancing consumer confidence that ultimately affects home sales.
- Mortgage lenders need to loosen guidelines for home refinance and purchase loans. This doesn’t mean we should go back to 2005 guidelines that promoted no money down loans for people with marginal credit. Nor am I suggesting stated income loans for borrowers that can’t afford a mortgage payment. Somewhere between 2005 and 2011 guidelines will help a lot. Borrowers who are interested in fixed mortgage refinancing and have demonstrated the ability to make their mortgage payment even if they have an underwater mortgage makes sense.
- U.S. government should extend a $10,000 tax credit for first time home buyers. This will spur home buying and a $7,500 tax credit should be offered to existing and former homeowners as well.
- Obama should commit to rebuilding Fannie Mae and Freddie Mac. Wall street and investors will respond more favorably if the Obama administration will lay out a real plan that calls for rebuilding government mortgage giants like Fannie Freddie rather than spreading rumors that you plan to dismantle and eliminate these finance agencies that the home finance sector has been relying on the last forty years.
- HUD should call for FHA to reduce mortgage insurance premiums for the next few years. By reducing the mortgage insurance FHA will reduce borrower’s monthly housing expenses. FHA loans have seen their popularity fall recently as they have increased the insurance premium three times in two years. Yes FHA rates are low but people are not attracted to hefty mortgage insurance monthly that washes out their savings.
- Private money lenders should roll out new low rate home purchase loans with a reduced 5% down-payment requirement.
- The government should expand the Home Affordable Refinance Program to help more struggling homeowners that are struggling with an underwater mortgage. By expanding the 125% loan program, more homeowners will be able to avoid foreclosures and lenders will see the delinquency rates fall as well.
- The Fannie Mae and Freddie Mac conforming loan limits should be extended. They are on track to be lowered any day and this does not stimulate home sales.
- Congress should increase 2012 FHA loan limits rather than decrease them. FHA mortgage limits are scheduled to fall any day. This significantly high cost regions like California, Connecticut, Colorado, Florida, New York, New Jersey, Washington DC, and Virginia. Many homeowners in these states own second properties in other states, so raising the loan limits will indirectly help these other states as well.
- Repeal the Dodd-Frank financial reform bill. This is a poorly written piece of legistlation was created so Chris Dodd, Barney Frank and their friends could grand-stand and pretend like they were part of the solution.
How to Find the Best Mortgage Lenders Online
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The reason you look for lenders and banks that have experience with the type of loan you need to find the best lenders is simple. They have streamlined processes that make getting a mortgage easy and straightforward. Here are a few tips on how to find the best mortgage lenders online in addition to choosing to shop for mortgages from lenders that have experience.
One of the most important items to look for when you want to know how to find the best mortgage companies online is the website itself. Most lenders, both online and in a traditional office are going to need your personal and financial information to offer an interest rate and loan terms. The best mortgage lenders keep this information confidential and very private. On the internet, this means that the website needs security. Look for the icon on the website that indicates a secure connection for entering your information when you shop for mortgages from lenders that have experience. Look for lenders and banks that have experience with the type of loan you need and that interact with you in a secure manner.
You can check on the companies you are considering by seeing if they are a member of the Mortgage Bankers Association or the Better Business Bureau.
Recommended Nationwide Articles for to Help Homeowners with Refinancing
Best Time to Refinance | When to Refinance a Home | How to Refinance with No Closing Costs
5 Top Home Loans for Refinancing
By · Comments1. Cash Out Refinance: To save money with home refinancing and get out of debt faster, many home owners are choosing cash out home loan refinancing. Taking advantage of record low home refinance rates, home owners refinance, increasing the amount of the loan to pay off higher interest debt or make improvements that will increase the value of the property. Borrowers with no equity will likely use FHA for refinancing and getting extra cash.
2. Fixed Rate Mortgage: If you have been investing in your home for years, you can save money with home refinancing through a conventional streamline refinance. Borrowers who have equity in their home will likely refinance with a conventional mortgage that offers low home refinance rates coupled with low fees and as little red tape as possible.
3. FHA Refinance: If they need cash for debt consolidation or home improvement, borrowers who have equity in their home will likely refinance with a conventional mortgage. Home loan refinancing with a conventional mortgage offers low interest rates and the potential for no mortgage premium insurance.
4. FHA Streamline Refinance: Simple home loan refinancing to bring down your monthly house payment with as few hoops to jump through and as few fees as possible is the goal of “streamline” refinance options. Borrowers with no equity will likely use FHA for refinancing, because little to no down payment is necessary to save money with home refinancing. Record low home refinance rates have made refinancing very popular, but borrowers who have equity in their home will likely refinance with a conventional mortgage because they can avoid the mortgage insurance premiums.
5. Adjustable Rate Mortgage Refinance: The least recommended of the top five mortgage structures, an ARM can offer the absolute record low home refinance rates in the beginning. The monthly payment does not stay fixed over the life of the loan as rates move. If an ARM is desired, borrowers with no equity will likely use FHA for refinancing.
