Fha Refinance Loan | NC FHA Expert

No Cost Refinance Cary Raleigh NC

When mortgage interest rates fall at least one percent below your current mortgage interest rate, it might be time to check on a refinance. In today’s market, people who are refinancing are primarily in one of two groups. There are ways to refinance with no cost out of pocket, and / or without adding to your balance. There are trade-offs to everything, so it’s important to understand what your motivation is.

Everyone is trying to save every penny in this economy… and so for some homeowners, getting the absolute lowest mortgage payment is the most important motivating factor. This is especially true when families are concerned about a potential layoff. Some of the ways to minimize your mortgage payment might be:

Refinancing to a lower rate
Consolidating other balances into your mortgage (paying off $15,000 in credit card debt by increasing your balance could save you over $650 a MONTH!)
Removing PMI by doing a 80-10-10 mortgage
Checking your escrow account and in some cases not including the escrow in your monthly mortgage payment.

For other customers, the concern is reducing the principal balance as quickly as possible. Look at this example:

Purchased home in August 2007 with 30 year mortgage at 5.75% fixed rate

Refinance in August of 2010 with 20 year mortgage at 4.875% fixed rate

Difference in payment is $22 a month… cost to you is @ $6500 (added to the mortgage balance) and the SAVINGS going to a 20 year from a 30 year is a total of $166,883 in interest!

There are costs associated with refinancing your home. In order to get a “No Cost” refinance, you are either:

Adding to your mortgage balance
Getting a slightly higher rate so that the Lender is paying the closing costs

Those are the only options. We will be glad to calculate the best option for you! Please call Steve and Eleanor Thorne, Professional Mortgage Planners, 919-649-5058. We offer the Best Mortgage Rates in Raleigh and Cary NC

If you want more information about a 4.25% (4.375% APR) mortgage Interest Rate, click here.

For information on VA Streamline Refinances click here

For information on FHA Non-Owner Occupied Refinance click here

For information on FHA Owner Occupied Streamline Refinance click here

For information on USDA Home Loan Refinances click here

FHA Streamline Refinance Changes Effective 1/1/2010

With the release of several Mortgagee Letters (directions to lenders regarding coming changes) HUD announced detailed changes for Streamlined Refinances.

FHA Streamlined Refinances are loans that are FHA Loans that want to refinance to lower the monthly payment, change the terms (like go from an ARM to a Fixed Rate) or (in the past) go from a 30 year mortgage to a 15 year.

Term reduction refinance transactions (going from 30 to 15yr mortgage) are no longer eligible for streamline documentation and must be underwritten and closed as no cash-out refinances. Here are some of the changes announced that go into effect January 1, 2010:

At least six months seasoning on the existing FHA mortgage.
No 30 days late mortgage payments if less than 12 payments have been due. (loan is less than a year old)
No more than 1 X 30 days late in the last 12 months if the loan is more than 12 months, and NO 30 day late payments in the last 90 days.
The new mortgage must provide a “net tangible” benefit for the borrower, meaning we must document that it is lowering the monthly payment, or you are refinancing to a 15 year from a 30 year which would reduce the overall cost of having the mortgage.
When refinancing from a fixed rate to a fixed rate or an ARM to an ARM, the PITI payment must be reduced by five percent or more.
When refinancing from a fixed rate to an ARM, the new ARM rate must be at least two percent less than the current fixed rate.
When refinancing from an ARM to a fixed rate, the new fixed rate may not be more than two percent above the current rate of the ARM.

The maximum mortgage calculation has been revised for streamline refinances with and without an appraisal. (click here to see the rules for 2009)

To Calculate the Maximum New Loan, Without an Appraisal: Outstanding principal balance including 30 days interest from the first of the month – UFMIP refund + new UFMIP= Maximum new loan amount

To Calculate the Maximum New Loan WITH an Appraisal: The Maximum loan will be the Lower of the following calculations

Calculation #1 Outstanding principal balance including 30 days interest from the first of the month – UFMIP refund+ closing costs and prepaid items for a new escrow account + new UFMIP= maximum new loan amount (Discount points may not be included in the closing costs)

OR
Calculation #2 97.75% of the appraised value + new UFMIP

Lenders must certify in writing that the borrower is employed and has income at the time of the loan application. (THIS IS NEW!!) In addition, verification of any funds required to close are required. (ALSO NEW!!) A copy of the payoff statement must be included in the case binder. If credit scores are available, they must be entered into the FHA connection. (ALSO VERY NEW and I’m afraid this is going to be bad news for some people)

The maximum CLTV with or without an appraisal is 125%. (For streamlines without an appraisal the CLTV is based on the original mortgage’s value.)

For more details – click here.

If you are considering a refinance of your FHA loan in NC – please call us! We know the details of getting the loan closed – and we have the BEST rates! 8o)) Steve and Eleanor Thorne, 919-649-5057