The Top 10 Things You Need To Know About An FHA Streamline Refinance Mortgage Loan!

Must Know Tips About The FHA Streamline Mortgage Refinance

You have made the right decision to start doing your research on the FHA Streamline Mortgage Refinance option that is available through the Federal Housing Association.

There are a few “Must Know” Tips about the FHA Streamline that you will want to consider and keep in mind as you are making your decision with whether to move forward or not.

1.) How long have you had your current FHA loan? If your loan was endorsed by FHA before June 1, 2009 your chances of maximizing your savings with the Streamline Mortgage is very high.

The reason that the date is important is because FHA decided to increase its monthly mortgage insurance in 2010. Unfortunately… not only did they decide to increase it… they decided to more than double it!

So, if you decided to do just a standard refinance or purchase after that date – the PMI is outrageous.

But, in June 2012 – FHA decided to help out current homeowners that have been struggling with plummeting property values. At that time, FHA rolled out the newest guidelines that say if you received your FHA loan before May 2009 then you can qualify for the new Streamline Program with the “rolled back” Mortgage Insurance Premiums that are real similar to what they were when you took out the loan.

This is a HUGE advantage over others who are thinking about refinancing their FHA loans who have had them for shorter time frames.

2.) Secondly, not only did FHA say that the monthly MI would be less… but they also decided that the Upfront Funding fee would also be a fraction of what it normally is on new loans. This is another benefit to the FHA Streamline Refinance guidelines that were rolled out in June 2012.

3.) One thing to keep in mind though is what you want to do with your closing costs. With most loans you can include them into your loan – simply financing them. With the Streamline Program, FHA will not allow you to do that without having an appraisal completed so you have two options. First, you can pay them out of pocket and bring some cash to closing. Or, Secondly you can take a slightly higher than market interest rate and ask your loan officer to give you a “lender credit” to cover the fees and title work.

Most lenders will have this option, and if they don’t you may want to shop around. The lender credit is a great tool for homeowners to utilize.

4.) FHA Streamline Credit Requirements: Ok, you may be wondering what kind of credit scores are required for the Streamline Mortgage Refin. Well, the answer is across the board… each bank is going to require different credit scores. Some require a 660, some require a 640, and I have seen a few allowing scores in the high 500 range.

Keep in mind, that the lower your scores are – the better chance that your interest rate will be slightly higher than the teaser rates that you see on TV, mail, and internet.

5.) FHA Streamline Appraisal Requirements: Everyone always wants to avoid having an appraisal done – and the Streamline Mortgage is the best way to avoid it. If you have decent credit scores and are willing to work in your closing costs with the lender credit or bringing cash at closing (as mentioned above) then this is a fantastic option for you.

Having no appraisal is a HUGE deal for FHA homeowners living in California, Florida, Arizona, Nevada, and other “high Depreciation” states. Getting past the appraisal requirements is a great way to save money and to avoid risking your hard earned money on an appraisals that may – or may not – come in where you need it to.

6.) FHA Streamline Income Requirements: If you are considering the FHA Refinance than your income will be verified to simply check to see if you are still employed or have an income stream. Your debt ratios are not analyzed in most instances.

7.) FHA Streamline Refin Processing Time: Most lenders can process a Streamline Mortgage Refin quicker than other loans. Some in as little as 10 -12 days. If your lender is telling you 60-75 days to refin your loan than it is time to start shopping around again. Some banks are so backlogged with loans they are putting refinances on the backburner while they finish up the more “important” purchase deals that they have in the works. Don’t let your Loan Officer do this to you… keep shopping around if you are told more than 3 weeks to close your Streamline Refinance.

8.) FHA Streamline Refinance Mortgage Closing Costs: Keep in mind, a Streamline Mortgage is a reduced documentation loan. Since it is less work then your fees should be less as well. If a lender is trying to charge you more than $1000 in lender fees than you will definitely want to keep looking around. You can find a lender doing these on a regular basis for $600 or less.

9.) Escrows: Yes, you will need to set up your new escrow account… and depending on your monthly taxes and insurance this fee could look pretty daunting on Streamline Refinance.

Even though this is a big fee, keep in mind that you will get your CURRENT escrow balance back from your current lender. This usually gets refunded to you about 3 weeks after you close on your new loan. With you getting your escrow balance back then this makes the new escrow fees almost a wash.

Don’t let that be a discouragement, despite the fee the FHA Strealmine Refinance will still save you thousands in the long run.

10.) FHA Mortgage Term: FHA is strict with this program… if you are going to utilize the Streamline Mortgage, you will be required to keep the same term or longer than the one you have now. If you are on a 30 year term now… you will have to stay on the same term. You won’t be allowed to change it to a 15 or a 20 Year without an appraisal.

These 10 Tips should be very helpful as you shop around for you new FHA Streamline Refinance Mortgage.

Rates are great… so don’t delay!

Refinance Mortgage With a Second Mortgage

Your choice to refinance a 2nd mortgage must never be taken with a grain of salt and yes, of course it’s a method of getting additional funds, but it also means acquiring a shiny new loan. You have to make sure the 2nd mortgage doesn’t only come with surplus cash, but better loan rates and terms as well.

Not just any situation would warrant refinancing and not every financial thirst can be solved with a 2nd mortgage and you have to contemplate every factor as well as expenditure involved with the procedure prior to making your decision. Below are a few great reasons which would definitely merit refinancing with a second mortgage.

Private mortgage insurance might have been levied onto your initial or even existing mortgage, but if you refinance with your second mortgage, you can avoid laying out for PMI. Many people don’t know this but, PMI is extremely expensive, although you may not even notice it because it could already be included in your monthly installments, however PMI can cost you thousands of dollars every year.

Through refinancing on a second mortgage, you may consolidate your current mortgage and possibly even other debts into a single loan. Of course, this would just be advantageous if your 2nd mortgage comes with better rates and terms, so be careful when shopping!

Had times been especially tough as you took out your first mortgage? That may be the reason for why your present rate of interest is unusually high, but today’s market is much different and there may be low interest rate mortgages that you can now benefit from. With low interest rates, you will be able to ensure decreased monthly payments too.

How about the terms and conditions of the current mortgage, are you satisfied with them? If not, then you can refinance using a second mortgage that has terms which go with your present financial needs. If your initial mortgage’s due to expire within the current year but you haven’t yet adequate money for that balloon payment, you may refinance with a 2nd mortgage to settle the preceding payment and rest easy with an extended loan period.

Last but not the least, refinancing with a 2nd mortgage will provide you extra cash. The volume of surplus cash at your disposal will naturally hinges on the amount you’ll borrow as well as the amount that you have to pay to settle the existing mortgage. All the same that’s nowhere near the end of that because if, for instance, you decide to sell your house, you could use a part of the proceeds to settle your 2nd mortgage. If you were lucky to receive the best refinance mortgage rates then you’ll probably get extra cash again when you close your loan.

The Way to Refinance with a 2nd Mortgage

If you’re bound and determined as to the rightness of refinancing then here is the thing you must do to refinance with a second mortgage.

Step 1. Amend or repair credit ranking

It is the only way to render you eligible for the greatest mortgage refinancing rates and though you can do this alone, you may also utilize the services of a credit repair specialist.

Step 2. Browse for interest rates

Know what companies provide the lowest interest rates, what they require are in return and the costs concerned and which of them could be used to your advantage.

Step 3. Make an application

Ensure that you read the rules of the 2nd mortgage before signing on the dotted line.

Shelling Out More Money After Your Refinance Mortgage Loan?

There are two nightmares plaguing our society today. The first is buying a gem of a car, and the second is getting stuck with an expensive refinance mortgage loans. Which is yours?

Jumping Into Quicksand

It is unwise to hurry a loan with insufficient information. Before you can extricate yourself from the mess, you have already sunk neck-deep into the quicksand of an expensive refinance mortgage loan, lured by the promise of lower interest rates.

Failure to understand how a refinance mortgage loan works, and the neglect of reviewing and comparing the features of different loans, including the policies of the various lending companies can result in 15-30 years of painful payback.

Ideally, a refinance mortgage loan should give you the advantage of lower monthly bills compared to the existing loan you will close. Of course, the longer the loan repayment period the lower the monthly dues, but if you sum it up, you will find out that you are paying not only double your loan but also triple.

A 30-year fixed rate switched to a 30 year adjustable rate, will lower monthly bills but after the honeymoon, get ready to pay more. If you were not aware of this, then it is high time to go to the bottom of a refinance – before getting another loan.

Always check the going rates and compare these with your present loan. You might be paying a higher monthly bill even if you got a loan with lower interest rates.

Did you get the right refinance?

Did you refinance just to have lower monthly mortgage payments? An astute borrower goes for a refinance to maximize available options that would work for their advantage.

One way to make refinance work for you is to switch from an existing credit to pay off your loan without living with the stress. If your current loan is a 30-year fixed loan, switching to a 30 or 40-year fixed refinance mortgage loan, you will get a lower monthly bill. A 30-year adjustable exchanged for a fixed 30-year will have you paying lowered monthly bills.

It may sound odd that switching a 30-year fixed rate loan to a 15-year payback will give lower monthly rates and build equity. Your equity is like money in the bank. As the values increases your mortgage payments decreases.

What is the right refinance mortgage loan

It all boils down to being able to pay the monthly bills for a number of years, and the savings you will generate from the new loan. It is a rule of thumb that a new loan must be 2% lower than your existing interest rate. But is this so?

Not always. Some companies will levy charges against you, which will make your loan more expensive in the long run. These charges come in the form of fees that they can think of – origination fees, appraisal fees, and closing fees – are just examples.

Another mistake when getting a refinance is rushing to get lower interest rates but erasing a number of years of payments made on the current loan. This happens when you’ve been paying a 30 year mortgage loan, and there’s 18 years left pay off the loan, and you refinance to a new 30-year program just for a few hundred dollars deducted from the monthly bills.

So you’ll end up shelling more money after your refinance mortgage loan. Is that what you want?