Saving Money Without Refinancing

August 31, 2009

Did you know that it is possible to save money on your monthly mortgage payment without refinancing?

It is.

Your mortgage payment is made up of PITI – or Principal, Interest, Taxes and Insurance. When you refinance, you typically lower your Principal and Interest – but did you know that it is possible to lower your Taxes and Insurance without refinancing?

To lower your monthly mortgage payment without refinancing, first focus on your taxes. Many homes across the US have actually went down in value, so they should have lower tax assessments, right? Maybe. But if you haven’ t had your property taxes lowered recently and you think your property values have went down, be sure to contact your local county assessors office and find out how you can appeal your property tax bill. You might be surprised how easy it is.

Next up, it is time to get multiple homeowners insurance quotes from companies that you know and trust. You might be surprised at how different rates can be between companies. Also when speaking to the agent, ask them what kind of discounts they give you if you install one of the best home alarm systems that you can find and what other kinds of discounts are available.

By focusing on your Taxes and Insurance – it may be possible to save money on your monthly mortgage payment without refinancing.


FHA Streamline Mortgage Refinance: No Debt To Income Ratio Needed

August 31, 2009

Normally, when you get a mortgage loan, the lender will calculate your total debt-to-income ratio – or in plain english, the amount of money you make each month divided by your total monthly bills. If your debt to income ratio is too high, you will not be able to qualify for a mortgage.

One thing that many people are starting to do who have too much credit card debt is something called debt settlement, but when you do debt settlement, your credit score suffers – so that is not a solution to “fixing” your debt to income ratio when needed.

So unless you can actually pay down your monthly debt, the only other way that you can “fix” your debt to income ratio is to increase your income.

But do you want the really good news? When you participate in the FHA streamline program, your debt to income ratio doesn’t matter. The reason it doesn’t matter is because the FHA streamline mortgage program doesn’t require that you disclose your income — so it would be impossible to calculate a debt to income ratio.  There are very few refinance programs that don’t require a debt-to-income ratio (the VA Streamline refinance is another) so if you are lucky enough to be able to do a FHA streamline refinance because you have met the other criteria, don’t delay!

Guidelines can change at any time.


How Many Times Can You Refinance With The FHA Streamline Refinance?

August 29, 2009

Question:

How many times can someone refinance their home with the FHA streamline refinance mortgage program?

Answer:

As many times as it makes sense.

Often, when interest rates trend downward, it can make sense for someone to refinance their mortgage multiple times within a relatively short period of time. For example if interest rates go from 8 percent to 5 percent over a 2 year period of time, it may make sense for someone to refinance their 8% mortgage to 7% and then 6% and then 5%. Of course, it might not make sense, but it might — and it all depends on the numbers.

This is why there is a test called the “net tangible benefit test” so that your loan officer can make sure that you are refinancing and that you can reasonably make sure that the benefits of refinancing outweigh the costs that are associated with refinancing.

The FHA streamline refinance program is no exception — as long as you pass the net tangible benefit test, you can participate in the FHA streamline refinance program as often as you it makes sense — even if you have participated in the FHA streamline refinance program recently.  If your case can pass the net tangible benefit test, then you have the green light for the FHA streamline refinance program… or at least as far as FHA is concerned you do.

Whether it makes sense to you is a different story though.


Is The 8000 Tax Credit Going To Be Extended?

August 20, 2009

Will the $8000 tax credit be extended?

It is quite possible that it could not only be extended, but also expanded. There is at least one proposal making its way through the legislative process that would extend the 8000 tax credit to all home buyers (not just first time home buyers) and also make it $15,000 rather than $8000.

The piece of legislation is called the Home Ownership Moves The Economy ACT and is officially known as  HR 2801. Even though it hasn’t been passed and has a ways to go, anything can happen in the process.

“H.R. 2801 (111th Congress) 2009-2010 Home Ownership Moves the Economy (HOME) Act of 2009, is a bill sponsored by Howard Coble, a U.S. Representative from North Carolina’s 6th District. Representative Coble’s bill’s goal is to extend the tax credit into 2010 as well as allow all home buyers take advantage of the tax credit.”

The official summary of the bill that was introduced on 6/10/2009 states:

Home Ownership Moves the Economy (HOME) Act of 2009 – Amends the Internal Revenue Code to:
(1) extend the first-time homebuyer tax credit to all individuals who purchase a principal residence (currently, only first-time homebuyers as so defined);
(2) extend such credit and the waiver of recapture requirements for such credit through 2010; and
(3) repeal the limitation on such credit based on modified adjusted gross income.

Will the 8000 tax credit get extended? In Washington, anything could happen – and expect this to be a fight as the deadline for the 8000 tax credit gets closer.


FHA Streamline Mortgage Rates: The Best Place To Find Them?

August 2, 2009

When rates drop, many people who are currently in an FHA loan want to participate in the FHA streamline mortgage program because it is the “easiest” and “best” refinance program for people in FHA loans. However; one of the most popular questions right away is:

What are the current FHA streamline mortgage rates and where is the best place to find them?

And lucky for everyone, one place has made it easy to find out what the current FHA streamline mortgage rates are: Zillow.com.

At Zillow.com, you can find the average that lenders are quoting people who want to participate in the FHA streamline mortgage program, that way you know that your particular quote might be higher or lower – but it should be close. And to make it even nicer, if you are having a hard time finding a loan officer who can help you with the FHA streamline mortgage refinance, you can easily find a great one on Zillow.com because they have it set up where you can let lenders “bid” on your loan. You might be surprised to see how many lenders you find just by filling out your information and letting them know that you are interested in the FHA streamline mortgage program and want to check out rates!


FHA Streamline: What Is The Deal With A Minimum Credit Score?

July 26, 2009

No doubt, if you are wondering if the FHA streamline program has a minimum credit score, you are probably confused. There is mis-information everywhere – or maybe the information that you see was correct at one time, but is no longer true.

FHA Streamline Rules For Minimum Credit Scores

Officially, FHA does not have a minimum credit score requirement for the FHA streamline program. BUT — lenders have started requiring minimum credit scores, and every lender seems to have their own set of requirements. Some lenders require a 580 minimum. Some require a 620. Some require a 640. And whatever they required yesterday as far as minimum credit score goes, it could change tomorrow.

Yes, there are even lenders still out there who do not require a minimum credit score on FHA streamline refinances.

So if you are currently in an FHA loan that has an above-market (right now, anything over 6% would probably be considered “above market”) interest rate, you can save money by participating in the FHA streamline refinance program. The FHA streamline program was designed to be “streamlined” as far as documentation goes – so it is not like when you first qualified for a loan. There is no income, asset or employment information that you need to provide with the FHA streamline program.

So if you are worried about the minimum credit score requirements with the FHA streamline program, be sure to shop lenders – you might be surprised to learn that there are still lenders out there who do not require a minimum credit score.


Can You Do An FHA Streamline With 3 30 Day Late Payments?

July 25, 2009

The FHA Streamline refinance program is designed for FHA borrowers who are in “good standing” to be able to refinance their FHA mortgage with as little documentation as possible. One of the most popular questions about whether or not someone is eligible has to do with “how many late payments can someone have before they are not eligible for the FHA streamline refinance program?

And the answer is…

It depends.

It depends on the lender.

It is possible that a loan officer at Lender A will tell you that you can’t have any 30 day late payments on your mortgage in the last year.

It is also possible that another loan officer at Lender B will tell you that you can have only one 30 day late payment on your mortgage in the last year.

And it is even possible that yet another loan officer at Lender C will tell you that you can have up to two 30 day late payments on your mortgage in the last year.

If you have more than two 30 day late payments in the last year, I am not aware of a lender who will allow you to participate in the FHA Streamline refinance program – but that doesn’t mean it is possible.

Because after all — how many 30 day late payments that you can have with the FHA streamline refinance program is really up to the individual lender.

Isn’t it interesting to see how many different ways the words “good standing” can be inturpreted?


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