Showing posts from March, 2016
Considering a Cash Out? Use Your Home’s Equity
When homeowners refinance their existing mortgage they have plenty of options and choices they need to make. For most borrowers who refinance, the primary motive is more than likely to obtain a lower rate. There are other good reasons, two of which are to refinance out of the instability of an adjustable rate loan into a fixed rate loan and to switch loan terms to save on long term interest. Of course, once the decision has been made to refinance then other decisions must be made as they relate to a specific interest rate. Decisions such as whether to pay points or not or whether to request a lender credit to pay for all or part of the borrowers’ closing costs during the refinance transaction.
The other option borrowers make is whether to pull cash out during the transaction. Pulling cash out during a refinance means taking home additional funds above and beyond the outstanding loan balance and closing costs. If the outstanding loan balance…
That’s a great question and at first glance the response might very well be to ignore refinancing altogether. First time home buyers who used an FHA loan to finance a home purchase might have worked with an inexperienced lender who didn’t work with FHA loans very often. That could very well have led to a less than pleasant home buying experience when it didn’t have to be so. The thoughts of applying for a mortgage all over again bring back headaches and apprehension. There are the pay check stubs and the income tax forms and the bank statements and answering all the questions the lender asks—it’s no wonder some decide to keep their current mortgage even though it might not be in their best interest. Which brings us to the point—is refinancing an FHA loan really worth it or not?

First, the FHA loan program offers a streamline refinance option not available with conventional mortgages. A streamline refinance asks for very little documentation from th…
CAN I QUALIFY FOR A HARP 2.0 IF I'VE BEEN DENIED IN THE PAST? One of the factors that helped our economy pull out of the recession caused by the financial crisis was the introduction of the Home Affordable Refinance Program, or HARP. First introduced in 2009 then later revised in 2011 this refinance program allowed borrowers to refinance their mortgages even though they owed more than the home was currently worth. Traditionally in order to refinance an existing conventional mortgage the maximum loan amount was limited to 90% of the current appraised value of the property. With the initial HARP, this initial obstacle could be overcome.

The first HARP allowed borrowers to refinance up to 125% of the current appraised value and that helped but there were millions more homeowners who owed much more. HARP 2.0 was introduced to eliminate the need for an appraisal altogether as long as the monthly payment was being lowered with a lower rate or the borrowers wanted to get out of the instabi…
DO VA LOANS OFFER FIXED OR ADJUSTABLE RATES?VA loans have evolved over the years in more ways than any other loan type. Part of the original G.I. Bill of 1944, the VA loan allowed for returning veterans of WWII buy a home without a down payment needed. This was a big deal back then as down payments were required on most every mortgage loan and soldiers really didn’t have all that much time to save money every month for a down payment.

During this span veterans applied for a VA loan directly with the Department of Veteran’s Affairs and as you might imagine things didn’t always go as planned as the loan application worked its way through the bureaucratic mortgage approval process. It would take weeks to get an approval and the VA appraisers would be used that weren’t familiar with the city much less the neighborhood. Later, the VA allowed approved lenders to not only approve the entire VA loan in house but also order the necessary appraisal from an appraisal management company and are ap…
COULD AN FHA LOAN BE YOUR BEST OPTION? FHA loans were first originated back in 1934 and over the years have developed into one of the most competitive mortgage programs in today’s market and especially so for first time home buyers. What makes an FHA a good option to finance a home and why do borrowers like them? FHA loans are one of the three primary government-backed mortgages, the other two are VA and USDA loans. VA loans are the best choice for those who qualify and want a zero down loan program and USDA mortgages also provide a zero down option but are limited to certain areas and the borrowers’ income cannot exceed specific limits. FHA loans have no such restrictions and can be used by a first time home buyer just as easily as someone buying a retirement home.

While FHA loans don’t have a zero down payment feature they’re awfully close. FHA loans ask for just a down payment of 3.5% of the sales price of the property. On a $250,000 home that’s just $8,750. Compare that amount to a …