Showing posts from December, 2015
HOW TO KNOW IF YOU’RE ELIGIBLE FOR HARP 2.0 The Home Affordable Refinance Program, or HARP, was first introduced in 2009 by Congress in an attempt to allow homeowners who were underwater on their property—owing more than the home was worth—to refinance their existing mortgage to one with a lower rate. This was made as an attempt to put more cash in consumers’ hands by lowering monthly obligations and by doing so, spending that extra cash somewhere in the economy.
The reason Congress had to step in concerns how traditional lenders evaluate a refinance application. A refinance is a brand new loan, it’s not simply an “adjustment” of an existing one. When someone decides to refinance a conventional mortgage, that borrower can go to any mortgage lender and doesn’t have to contact the current lender in order to refinance. Borrowers can shop around for the best rate and terms. However, refinancing an existing conventional loan does require equity in the property, a sort of “down payment” on a …
WHAT IS PMI? SHOULD YOU REFINANCE EVEN IF ADDING PMI? What’s PMI? PMI is the acronym for Private Mortgage Insurance. Private mortgage insurance came into play in the late 1950s as a response by conventional lenders to compete with low down payment, government-backed mortgages. Prior to PMI, conventional loans asked for a 20 percent down payment. That’s a lot of money, especially for the first time home buyer and a major reason why most first timers selected the FHA loan instead of a conventional mortgage. Conventional lenders couldn’t compete with low down payment loans. That is until the introduction of PMI.

In practice, borrowers purchase a private mortgage insurance policy and typically pay this premium each monthly along with the rest of the mortgage payment, taxes and insurance. The insurance premium covers the amount between what the borrowers put down and the 20 percent requirement. If the borrowers put down 10 percent, the policy would compensate the lender for the other 10 perc…
BENEFITS OF A MANUFACTURED HOME Thinking of a manufactured home? Did you briefly put the thought in your head of living in manufactured housing but quickly visions of a dilapidated trailer park appear? Well, think again because manufactured housing isn’t what is used to be. Today, manufactured homes are very similar compared to standard housing and some manufactured homes look almost identical to any other property type because manufacturing technology has improved not only the appearance but the durability as well while keeping costs down.
That’s one of the major draws to manufactured homes—the cost. The average cost of a manufactured home is around $65,000 while the average single family structure is approximately $270,000. Buyers of manufactured homes can obtain all the standard amenities of other homes while keeping affordability within reach.
Manufactured homes are built in a factory on an assembly line and takes much less time to build a new manufactured home compared to a single f…
We all have our own monthly obligations and expenses we must consider each month. Many of our expenses are mandatory while others are by choice. We need to pay our mortgage each month. The electricity bill. Mobile phone. Insurance. Car payment. These are just a few of the monthly bills we have to pay but when we add in additional discretionary spending, especially just after the holidays when we might have spent more than we had planned, making monthly payment on time can be a bit confusing even overbearing at times. At other times of the year, expenses are more easily handled and bills paid on time when discretionary spending is lower. Yet keeping track of all these bills and making sure there are no payments made after the due dates can be a challenge sometimes. Here are a few tips to keep you on track.
Set Up Auto-Pay
This is the most convenient way to make sure your payments are made on the due dates. Remember, even though credit r…
IS AN ARM RIGHT FOR YOU? Is an ARM right for you? Is an adjustable rate mortgage loan a perfect answer to your mortgage loan requirements? ARMs were prevalent choice for years before mortgage loans became standardized with the creation of government-backed loans as well as loans approved using Fannie Mae or Freddie Mac standards when long term, fixed rate loans became the norm. ARMs are often the answer when interest rates overall are relatively high. During times of high rates, ARMs will be lower than fixed rate loans and can be an ideal opportunity under the right circumstances. Is an ARM right for you?

Lenders offer adjustable rate mortgages as part of their mortgage repertoire. An ARM has an index, a margin and caps and just as the name implies, can adjust over time but only based upon prescribed circumstances hard-wired into the original note. A common index for an ARM might be the one-year Treasury bill and a common margin 2.25 percent. If a borrowers’ ARM were set to adjust in 60…
WHAT YOU GET OUT OF A VA IRRRLThe military is always good about coming up with acronyms and the Department of Veteran’s Affairs is no stranger. The VA IRRRL stands for the Veteran’s Administration’s Interest Rate Reduction Refinance Loan. If you currently have a VA mortgage and are thinking of refinancing, your mortgage lender will no doubt talk about this special mortgage program. It’s easy to qualify for as long as the existing and future loan meets certain conditions. So easy that it’s nicknamed a “streamline” mortgage by VA lenders. What’ so special about the IRRRL they call a streamline?

The reason the loan is so easy to qualify for is because there is hardly any documentation needed to approve the loan. In fact, it probably takes longer to list what isn’t needed compared to what an approved VA mortgage lender will ask for. What surprises most streamline borrowers at first is there is no income documentation required. When borrowers first take out a VA loan they’re asked to provid…
WHY CHOOSE AN FHA MORTGAGE LOAN?As consumers who really don’t get a mortgage but just a few times in their entire lives, the differences between mortgage programs really may not seem that big of a deal. But there is a reason why there are different mortgage types and historically they provide financing solutions based upon an individual’s personal situation. That’s where an FHA mortgage loan comes into play. The FHA mortgage was first introduced in 1934 as Congress tried to bring some sense of normalcy when financing a home. Back then, banks could require a down payment as high as 30, 40 or even 50 percent and offer short term financing for just a few years which means the borrowers would have to either pay off the entire loan when it came due or refinance all over again. The Federal Housing Administration changed all that with universal guidelines that lenders could follow, not matter where the property was located.

FHA is not a mortgage lender but instead is more of an insurance comp…
USING HARP TO YOUR ADVANTAGE What is HARP? HARP is the acronym for the Home Affordable Refinance Program, first established by Congress in 2009 then adjusted to fix a few things, quite a few actually, in 2011. HARP was first implemented to allow homeowners with a mortgage to refinance an existing loan into one with a lower rate or get out of an adjustable rate mortgage into a fixed. Why was HARP even needed? Because conventional mortgages need at least a 10 percent equity position before a loan is eligible to be refinanced. As rates begin to fall rather precipitously toward the latter part of the past decade, millions of homeowners refinanced. All except those with conventional mortgages and no equity.

As mortgage rates fell, so too did home values and without at least 10 percent in equity, millions of homeowners couldn’t take advantage of lower rates. As HARP was introduced, it was done with the idea that lower monthly payments would free up more monthly cash which could then be pumped…
Is this your first home? Second? Last? Whatever situation you’re currently in, buying a home really is a big deal. It will be the largest single purchase you’re likely to ever make. And even if you have financed a home purchase before and especially if this is your first, there are some things you definitely should do and should absolutely avoid.

Use a Real Estate Agent
Near the top of your list of things to do is to use a real estate agent. When you hire a real estate agent, you’re getting the experience and negotiating power from someone who is in the business full time. And what’s better? You don’t have to pay for this expertise, the seller of the property pays for your real estate agent’s commission. An agent will help you find the right home based upon your own needs and make sure you get the best deal possible.

Get Preapproved
When you first speak to a real estate agent one of the first things you’ll be asked is if yo…
SUBPRIME LOANS: WHAT ARE THEY AND ARE THEY RIGHT FOR YOU? Subprime loans, those issued to borrowers whose financial and credit situation is “less than prime” are a sub-class of mortgage loans that been available to borrowers over the years. Subprime loans essentially vanished during the mortgage debacle of the last decade but are beginning to make a comeback. And, under the right circumstances, can be a viable option for certain borrowers.

Subprime loans historically are issued to those who have damaged their credit and need a loan that can help finance a home and restore a credit profile. Such loans will have higher rates and a higher down payment compared to other loan programs. The problems with subprime loans began to emerge when certain subprime lenders began altering qualifying guidelines they normally used to rely on. Subprime loans were rarely approved under “stated” or “no documentation” scenarios but as subprime lenders looked to expand their customer base, they slowly began t…
SHOULD YOU REFINANCE THROUGH A MORTGAGE AGENT OR A DIRECT LENDER? Many homeowners have been interested in refinancing their home loan lately and even if now is not the time that time may occur in the future. Refinancing can save a lot of money over the life of the loan and is worth the effort to investigate if a refinance option is best for your own situation. One choice you will discover in the investigation process is whether to use a direct lender or a mortgage broker.

One difference between a direct lender and a mortgage broker is that the direct lender is a single lending source. This can make the transaction of getting a refinanced loan faster to finalize. A mortgage broker is generally representing several different lenders. This can be useful for refinancers who are interested in finding the best conditions for a refinancing, but it can add time to the process because the consumer is not working directly with the company that will provide the loan.

Some consumers have a mistaken …
HOW TO MEET THE "NET TANGIBLE BENEFIT" TEST FOR FHA STREAMLINE REFINANCING The mortgage refinancing program called FHA Streamline offers current Federal Housing Administration mortgage holders one of the simplest, fastest, and most inclusive opportunities on the market. The program doesn't require income or credit verification or even an appraisal. FHA Streamline refinancing loans are mostly based upon having a good mortgage payment history. With that said, the new loan must usually meet the net tangible benefit requirement.

Understanding Net Tangible Benefit
Very specific exceptions apply, but the new loan must first meet one of these test:

The new loan has to offer at least a five percent reduction of private mortgage insurance premiums and mortgage principal and interest payments.The loan doesn't have to meet the requirements above if the borrower refinances from an adjustable rate loan to a fixed rate mortgage.
In simplest terms, the FHA's requirements provide the…
5 WAYS HARP 2.0 CAN HELP YOU HARP 2.0 can help you refinance your mortgage. Specifically, if you hope to refinance your mortgage but you have little equity in it, you may find other lending options unavailable. Many Americans are facing difficulty refinancing because they owe more on their home than it's worth. If you have a Fannie Mae or Freddie Mac owned mortgage and you've remained current on your mortgage payments, let our team help you qualify for a HARP refinance.

How Can Refinancing with a HARP 2.0 Loan Help You?
When you contact our mortgage lender, we'll provide you with very specific benefits that these refinanced mortgages can offer to you. For many people, the following are key reasons to refinance:

#1: You may be able to lower you monthly payment. If you hope to pay less each month, and perhaps use those funds for other expenses, HARP may be ideal.

#2: You want to reduce your interest rate. Many homeowners can see a substantial drop in their interest rate (and ther…
WHY YOU SHOULD REFINANCE WITH A VA HOME LOANA VA home loan presents the perfect opportunity for those who would like to refinance. Perhaps the best part of VA home loan is the fact that homeowners can refinance up to the entire value of the home. Add in the fact that borrowers do not have to pay for mortgage insurance and it is easy to see why VA home loans have become so popular. This is a stark contrast to traditional home loans that usually require equity in the house.

If you are a veteran, have a veteran in your family or know one, you should strongly consider refinancing with a VA home loan. This is the perfect opportunity for veterans to take advantage of housing values that are continuing to bounce back. Anyone who is a member of the military and on active duty, a reservist, a veteran or a member of the National Guard is eligible for refinancing through a VA home loan.

A streamline refinancing program called the interest rate reduction financing loan, also known as IRRRL, allows …
BANK DENIED HOME LOAN. WHAT SHOULD YOU BE DOING NEXT?Denied credit is every prospective borrower’s nightmare. There are many reasons why a home loan can be denied ranging from a low income to excess debt. A FICO survey evaluated the common factors that puts loan at the risk of being denied. The results showed that one of the primary reasons why lenders were hesitant about approving mortgages was high debt-to-income ratios. Multiple applications in a short time span followed closely behind. Interestingly, a poor FICO score was a crucial factor for loan denial only in about 10 percent of the cases. This is understandable as the score simply sheds light on the borrower’s reliability and not on their financial capabilities in terms of purchasing the house. So if you’re shopping around for home loans, you want to first look at maintaining the debt-to-income ratio under 36 percent.

Why has your loan been denied?
Federal law necessitates that lenders notify prospective borrowers on the reason …
WHAT YOU NEED TO KNOW ABOUT A VA IRRRL LOAN Tightening lending standards by banks are directly responsible for the high demand for Veterans Affairs mortgages (VA loans), available to over 22 million veterans and active military members. If you have an existing VA loan, it is a good time to lower your mortgage rate with a Veterans Affairs Interest Rate Reduction Refinance Loan (IRRRL).
Also known as a Veterans Affairs Streamline Refinance, this program does not have the typical requirements imposed in a traditional refinance, such as credit checks, employment and income. It also requires less paperwork and documentation. If you have made timely payments on your mortgage, qualifying for refinancing under this program becomes easy.
Refinancing to reduced mortgage rates is more or less a quick process, and usually completed within a month of filing the application. Lowering the rate is also uncomplicated as VA mortgage rates are usually 30 basis points below the rates for a comparable tradit…
IS THE HARP 2.0 BETTER THAN HARP 1.0? The Home Affordable Refinance Program or HARP came as a boon to many homeowners who were seriously upside down with their mortgage loans. Thanks to this refinance program, many of them could switch to a lower cost loan and reduce their debt burden quite significantly. According to, about a million homeowners benefited from the HARP program between 2009 and 2011. However, the 125% LTV limitation prevented many others from taking full advantage of this refinancing option. To address this gap, the HARP 2.0 was launched later as the improved version of this program, prompting many beleaguered homeowners to contact mortgage lender companies immediately to learn about these loans.
No more 125% LTV restrictions The most significant difference between the HARP 2.0 and the earlier version is that the 125% LTV restriction no longer applies. In states where the housing crash had particularly devastating impact, this comes as a huge relie…