FHA Cash Out Refi >85% requires two appraisals
FHA Home Loans
Fore loans submitted on or after January 1, 2009 (casefile created), FHA now requires a second appraisal for cash-out refinances with the loan to value is greater than 85%. This means if your home is valued at $200,000 and your loan amount is $170,100 you will need the second appraisal. If your loan amount is 85% or less, for our $200,000 home that would be $170,000 or less, you will not be required by FHA to have the second appraisal.
If your home is a single family residence detached from other homes you will only need an exterior appraisal, called a 2055. However, if your home is a condominium, duplex or other attached residence you will need the full FHA approved appraisal. This appraisal includes the 1004, 1073 and 1025 on the appropriate forms.
The additional burden of cost to you is different by jurisdiction and set by appraisers in your area. The first appraisal and second appraisal may be required to be performed by designated appraisers depending on your lender. Average cost will be an addition $200 to $500 to the borrower for this new regulation.
Have a nice day.
Mortgage rates headed to double digits
Ken Cook
When you have spent enough time in your own industry you learn to read or sense change by subtle changes and scuttle from insiders. If you are a musician, for example, you know of a subtle change in beat patterns or melodic phrasing long before the general populace. Likewise if you are in the medical profession you will hear something at a seminar or read it in a published research paper long before the rest of the world knows about it. If you expect anything different from the finance and mortgage industry you are stopping short.
Long before, literally years before in some cases, the remainder of the open world knew there was trouble on the horizon for the real estate and finance industry there was scuttle in the mortgage industry. Then months before it started the scuttle got louder. Finally just weeks before the fallout started happening it was being shouted in the industry and starting to leak to the remainder of the world.
Today there is scuttle and it is not quiet scuttle. It is also backed by sound research and trend patterns that indicate we are headed for another impacting change in the real estate finance industry. Lately, as you may already know, the federal government of the United States has started purchasing Mortgage Backed Securities. Their purpose behind this is to instill confidence in other investors that it is “okay to get back into the pool”. Since this was supposedly the main focus of the initial bail-out plan the activity should not come as a surprise. Unfortunately, and already predicted by some seasoned economists, the impact on the market is more like dropping a pebble in the ocean. The result could be further recession strengthened by inflation.
In the end, according to many insiders, the result will be higher rates -even into the double digits- by the end of 2009 if not sooner. If I were in need of purchasing or refinancing I would not wait. Some insiders believe mortgage interest rates could go as high as double digits and sooner than we all may think.
At the time of publishing this article there are interest rates on 15 year mortgages as low as 4.625% at 4.737APR and 30 year mortgages just .25% higher. People, it just doesn’t get any better than this. Mortgage rates, without government subsidies to the banks, will never get much lower. In fact, it is impossible. As long as investors and depositors want a return there must be profit. So until you, Mr. and Mrs. General Q. Public, will in invest in lenders for zero return the interest rates cannot go below 4.5%.
FHA Streamline Refinance
Did you know if you have an existing FHA home loan that you can refinance to a lower rate using something called an FHA Streamline Refinance? The advantage of the FHA streamline refinance is to allow the home owner to refinance from an existing FHA home loan into a new FHA home loan with a lower interest rate resulting in a lower monthly payment. All Georgia and Florida home owners who have an existing FHA home loan are eligible for the FHA streamline refinance.
The most important fact to qualify for the FHA streamline refinance is that the borrower not have been late on any payments during the last 12 months and that the existing home loan be an FHA home loan. Some of the amazing features of the FHA streamline refinance, especially for borrowers in many areas of Georgia and Florida are:
- No appraisal may be needed under most circumstances
- No income verification is required
- Mortgage interest rates are very low right now
- Closing is quicker than a normal refinance
There are only a couple of “downsides” to the streamline refinance which really are not downsides. The most important is that this is not a cash-out refinance. The other is that if you cannot pay the closing costs out of pocket you will need an appraisal on your property.
Not needing an appraisal is huge right now because of the recent declining values in real estate all throughout the southeast and the rest of the nation. This allows the home owner to refinance to today’s lower home mortgage interest rates into a new FHA home loan even though the existing payoff may be more than the present value of the home.
Call my offices today at 678-946-0100 or 866-946-0120 to get more information and to start the process to take advantage of rates that really cannot get much lower if they get lower at all.
Will Mortgage Interest Rates Go Lower?
As a mortgage banker I am asked this question often. Some of my colleagues even answer it often with reckless disregard for the truth.
When asked this question by a blind call in my first reaction as a human would be to ask, “are you kidding?” Wearing my concern for care hat, however, I can only answer honestly with “I don’t know. I don’t think they will go much lower since they have already been at 4.5% with no points for a thirty year fixed mortgage but it is possible.”
Some large national lenders and local brokers alike have tricked many people with rates over the years and that is one thing I have never and will never do. Right now the rates are very low – historically and amazingly low. But here’s more: the rate may not be your rate. Be wary of any offer of a rate more than .125% lower than what you see offered on the Novation Mortgage website where mortgage interest rates are very low.
Once more: the rate may not be your rate.
The rate you see quoted in the newspaper, hear on the ads and see on television is always either the best case scenario or misleading. Unfortunately even I frequently get solicitations from a country wide lender which are nothing short of misleading so be very careful regardless of the name attached to the ad. Especially be very wary of the national lenders.
Call me for some truth even if I do not lend in your area. My name is Ken Cook and my phone number is 678-946-0101. I will tell you exactly what you want to hear: the truth.
Should I Refinance Today?
By the time you read this article everything will have changed. One thing is certain about the mortgage banking industry and that is change. Do not take this as a smack on the face because it certainly is not intended to be but it should be somewhat of a wake-up. The truth is the far above average home owner and real estate investor are not capable of properly answering this question. We, and I include myself, make the terrible mistake of thinking if we know a few terms about something that we understand it well enough to make important decisions. Most people are not capable of making wise or even correct mortgage decisions. The frightening part is most loan officers also do not have any idea how to really determine if a certain mortgage is the best for you.
Be not dismayed: Even financial planners are often wrong with their advice.
So, am I the genius to answer the question? No. But I will give you a little more information than you probably already had to help you make the best possible decision you can make for yourself, your family or your investment strategy. More than that this may help you avoid “tricks” used by the so-called “no closing costs” providers. By the way, “no closing cost home loans” do not exist. There is no such thing as no closing costs. There are always closing costs and one way or another you always pay them. Repeat that to yourself: there is no such thing as a loan with no closing costs. If you refuse to believe that you are beyond help and get everything you deserve. (I write that with a sideways smile.)
There is a long standing argument among many people as to which is more important between interest rates and monthly payments. The bottom line is: nobody can answer for you. They can pontificate for weeks but ultimately it is your decision. So let me direct this to you about the difference between interest rates and monthly payments and how this could become an issue.
Most people automatically assume that if you have a lower interest rate you will have a lower monthly payment. They also often assume, and to their detriment, that a lower payment or lower interest rate may be the best loan. Neither is true and both are true but the paradox is simple to decode. FOr example a fifteen year mortgage has a lower interest rate but a higher monthly payment. A forty year mortgage has a higher interest rate but a lower monthly payment. So which best fits your goal?
For today I can actually offer a loan to the right buyer for 4.75% with no discount points. This loan has an APR of 4.893 which is still phenomenal. What you, Mr. or Ms. Borrower, need to understand about numbers like this is this is not *your* number. In fact it is the best case scenario number. Your rate may in fact be much higher from any and every lender -not just us. There are “hits” to rate and adjustments to pricing which are, in part, dictated by Fannie Mae or Freddie Mac. Those are called Loan Level Pricing Adjustments and they are based on the risk presented to FNMA or FHLMC by the borrower, the property and the type of loan.
If you and I were on the golf course and you asked, “Ken, is this a good time for me to refinance?” If I did not start my answer with, “What are you trying to acheive?” I would be a fool to answer. This may be a great time for you to refinance you loan with interest rates as low as they are today but this may be a horrible time for you to refinance if you are living in a home with an upside down mortgage, you have had a change in careers or an income drop, your debt-to-income ratio is off the charts or any other number of reason. Now, if you are one of the few who qualifies for the advertised rate and you have equity in your home (which you would to qualify for that rate) then yes, this is probably one of the best times in recent history to refinance in to a long term fixed rate mortgage.
Call me and let me be honest with you. We can refinance your Fannie Mae loan in Georgia or Florida and your FHA loan anywhere in the southeast. 866-946-0120
Congratulations Warner Robins – Best Place To Raise Children 2009
The Businessweek list of the 50 best places in America to raise children is out and our own Warner Robins, Georgia is on the list! Read the listing and see the photo here.
Warner Robins is just a little over an hour south of Atlanta and minutes from the former state capitol of Macon. Our FHA home loans are perfectly suited for the majority of home mortgages for new homes or to refinance a home in Warner Robins.
Is It Still Possible To Refinance?
The short answer is “yes”. The long answer is that for a few reasons it may be more difficult to acheive a refinance today but never assume it is or is not the right thing to do until you speak with a reputable home mortgage banker like one of the well trained and highly experienced lenders at Novation.
While it is true that housing values have declined in most markets it is also true that refinancing to shorten your repayment term or get out of an adjustable rate before it is too late to do so may be a smart idea and may be the right idea for you. Again you will need to consult with a trustworthy mortgage consultant to determine if a refinance will satisfy your needs.
Refinancing today is more restricted than it was in 2002 through 2007 but that is not necessarily a bad thing. The dangerous types of loans that plagued the industry through that period are gone and what we are left with are conservative loans for conservative buyers. Income is usually required to be fully documented as are assets and values have to be supported by unrelated third party appraisers who examine the property and determine its value by comparing it to recent sales in the immediate market area.
So, to refinance your home loan today can make sense if you are lowering your payment, consolidating other long term, high interest loans, or bettering the terms of your loan.
Live Desk
Daily Rates for Qualified Buyers
Today |
Last Week |
|
| 30 Year Fixed | 3.58% | 3.65% |
| 15 Year Fixed | 2.91% | 2.89% |
| 5/1 ARM | 2.73% | 2.57% |
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