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Which Streamline Refinance is Right For You?

Which Streamline Refinance Is Right For You?

Which Streamline Refinance Is Right For You?

Orange County, CA – While low mortgage rates have helped the housing market, they have also caused a huge surge in the number of refinance deals we are seeing. At the moment, refinance deals are accounting for an incredible four out of every five mortgage applications across the country.

At the moment, the most common type of refinance is the streamline refinance. This is a standard term for a type of mortgage that does not require considerable documentation, such as a standard ‘refi’. There are a few of these streamlined mortgages available, and all are a little different from each other.




Kylee and I gave a presentation on this very subject this Wednesday in Irvine. Here are some of the streamlined program offerings:053

HARP-Home Affordability Refinance Program

To be eligible, you need to have a mortgage which is securitized on or before May 31 2009. You must be current on your loan payments and you need to have no more than one late payment on your mortgage in the last twelve months. These loans are only available for notes that are owned by Fannie Mae or Freddie Mac. You may be saying to yourself…I don’t make my payment to Fannie Mae or Freddie Mac. However, the owner and service of a mortgage can be different. You may make your payment to Wells Fargo but Fannie Mae still owns the note. To determine if Fannie Mae or Freddie Mac owns your mortgage you’ll need to check their loan look-up websites here:  Fannie Mae  and Freddie Mac

The best feature of HARP loans is the unlimited loan to value. This means your home can be worth half of what you owe. And as long as you meet all other requirements you can refinance to a lower interest rate. And there are no specific requirements to be met in terms of your earnings. If you think that HARP might be for you, you need to be quick – it’s only going to be available until 31st December 2013.

048FHA Streamline Refinance

This is for you if you have an FHA insured mortgage. Your loan needs to be at least 210 days old or more. There has to be a purpose behind the refinance – in other words you need a Net tangible benefit to undertake the new refinance. For instance a reduction in the principal + interest + mortgage insurance payment by 5% or more would qualify as a net tangible benefit. You also need good payment history – no late payments in the three months prior.  Income, assets and credit is not assessed, and no appraisal is required. The real bonus is for those whose FHA mortgage was endorsed on or before May 31, 2009. Under these circumstances, you will be grandfathered with FHA’s reduced mortgage insurance rates. Since that date, FHA mortgage insurance rates have risen precipitously.

VA Interest Rate Reduction Loan

This is available to people who have a VA guaranteed mortgage. This is funded by the Department of Veterans Affairs. To qualify for this one your mortgage payment needs to be reduced through the refinance, unless it is ARM-to-Fixed rate refinances.  You can’t have more than one late payment over the previous twelve months.  Manage all this though, and you do not need your credit or your earnings verified. You also won’t need a home appraisal to take place either. A further bonus is that you don’t have to pay mortgage insurance no matter what your loan to value ratio. Finally the funding fee is only 0.5%!

USDA Streamline and Pilot Program Refinances

If you already have a USDA guaranteed home loan, then one of these could be for you. The property must be your primary residence. Second homes and investment properties are not allowed. For the Pilot Program you must reside in one the 19 pre-approved states. And again mortgage history has to be good with no more than one late payment during the last twelve months.

Positives are that there is no income, credit or employment verification required, and appraisals are not needed either. Therefore, underwater properties can be refinanced too.

Obviously the critical next step is talking to a mortgage professional. Find out which is the best streamline refinance option for you, and see if you’re eligible!

Scott Storace

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