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Refinancing

There has never been a better time to refinance your existing mortgage. Today’s fixed and ARM interest rates are the lowest in a generation and there are a wide range of refinance programs in existence that are new to the marketplace. To help determine what program is best for you, we offer the following information

 

FHA Financing

Federal Housing Administration Loan (FHA),  assists borrowers who may need a low down payment and flexible mortgage guidelines. The FHA loan is a great product that helps many people refinance. There are numerous refinance programs available through FHA from fixed rates to streamlined programs designed specifically for those holding a current FHA loan. Even if you hold a conventional mortgage, an FHA refinance may make sense as it typically has less stringent qualifications. Similar to conventional fixed-rate options, you can obtain an FHA fixed rate loan in a 30-year or 15-year option. The same benefits would apply as a conventional fixed-rate—the stability of a consistent rate over the course of a loan. Also, credit requirements may be less stringent if you are concerned about qualifying under conventional guidelines.

Basic Profile:

  • Under the FHA streamline program, current FHA loan borrowers can refinance with no appraisal.
  • Up to 97.75% loan to value (LTV) for a rate and term refinances.
  • Up to 85% loan to value (LTV) for cash out refinances.

Conventional Financing

A type of mortgage in which the underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac. About 35-50% of mortgages, depending on market conditions and consumer trends, are conventional mortgages. In other words, Fannie Mae and Freddie Mac guarantee or purchase 35-50% of all mortgages. Conventional mortgages may be fixed-rate or adjustable-rate mortgages.

Basic Profile:

  • Cash out available to 85%
  • Minimum FICO 620
  • Maximum loan amount of $417K
  • Unlimited cash out

HARP Option

Home Affordable Refinance Program is an option if your current mortgage is insured by Fannie Mae or Freddie Mac.
These programs are commonly referred to the Fannie Mae DU Refi Plus and Freddie Mac Open Access. These programs were designed for borrowers who have made their mortgage payment in a timely manner; however, have not been able to refinance as a result of lower home prices.

Basic Profile:

  • Must be current on your mortgage and have no record of late payment within the last six months, and may only have had one late payment maximum over the past 12-month period. The current loan-to-value ratio (LTV) must be higher than 80%.
  • Your mortgage must have been sold to or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009.
  • Your mortgage must not have already been refinanced through HARP in the past, unless it happens to be a Fannie Mae loan that underwent a HARP refinance between March and May 2009.

VA Financing

Veteran’s Affairs (VA) loan. The VA loan is an excellent loan that can assist our veterans who may want to refinance to take advantage of a lower interest rate via an interest rate reduction refinance loan (IRRRL) or cash out. If you currently hold a VA Loan or are eligible to move to one, there are also several available refinance options.

Cash-out Refinance
This program is designed to help you tap into the equity in your home. Perhaps your property has increased in value since your purchase and you’d like to take some of the equity to help pay off other bills. This loan will allow you to access up to 90% of your home’s current value.

Rate-Term Refinance
A rate-term refinance is for an eligible borrower that may be currently in a conventional or ARM that wishes to move to a VA loan. This program offers the ability to finance up to 100% of the property’s value and never requires mortgage insurance. This is a fixed- rate loan and provides the same level of stability as other fixed- rate products. This can ultimately help a borrower save on monthly payments while incurring very minimal out-of pocket expenses.

Interest Rate Reduction Refinance Loan (IRRRL)
This is a streamlined program for those borrowers currently in a VA loan. It is designed to help lower interest rates, change the overall terms of the loan such as moving from an ARM to a fixed-rate. There are typically no out-of-pocket expenses and no appraisals are required. Another great benefit of this program is that documentation requirements are eased and processing is usually quick.

Basic Profile:

  • Up to 90% of the home’s value for cash out.
  • VA interest rate reduction refinance loan (IRRRL) simplifies the refinance process. Cash out not allowed.
  • Second home and investment properties allowed with the VA interest rate reduction refinance loan (IRRRL). See your Mortgage Loan Officer for details.

USDA Financing

USDA mortgage holders may participate in the USDA streamline refinance program. This program allows current USDA mortgage holders to reduce their interest rate without the need for an appraisal. This program is only available to current USDA mortgage holders. The USDA Refinance Pilot Program is available in 19 states. If you currently have a USDA home loan, you may be eligible to refinance without an appraisal. Many current USDA mortgage holders could see significant savings due to the current low interest rates. You may call one of our USDA Loan Specialists to apply by phone or you may request information via email below. There are minimal criteria that USDA mortgage holders must meet in order to qualify for the program. Our USDA Loan Specialists will check your eligibility in a matter of minutes.

Basic Profile:

  • USDA refinance loans are only for existing USDA Guaranteed or USDA Direct Home loan recipients.
  • Your existing USDA home loan must be paid up to date with no recent late payments in the past 12 months.
  • If you choose to go with the streamline refinance option, an appraisal will not be necessary.
  • The amount of your new loan must result in at least a 1% lowering of your monthly mortgage principle. Also, the USDA refinance program does not allow any cash to be taken out of the equity of the home, like in most traditional refinance programs. However, the USDA refinance program does allow you to take up to 102% of the appraised value of the home and put some of that money back into the home through renovations and repair projects.
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