New FHA Streamline Refinance Program Enables Millions to Refinance

As of June 11, 2012, the Federal Housing Administration (FHA) will allow homeowners to save even more money on their home refinances. All home owners who have an FHA loan are now being given the opportunity to refinance their mortgage without any closing costs or up-front fees.

The FHA has traditionally offered refinance options but with a cost; most refinances cost upwards of $3,000 in closing fees and dues at the time the refinance is finalized. The new FHA streamline removes all fees and charges, enabling those who are currently paying on an FHA loan the chance to start saving money immediately.

The old FHA refinance required an up-front insurance premium, which cost approx. 1% of the value of the loan. This fee, which made up the majority of the up-front costs, has been slashed to just .01% of the total loan value, saving home owners thousands on the cost of a refinance. In addition, the FHA guaranteed private mortgage insurance (PMI), cost was previously charged at the rate of 1.10%, has been reduced to just .55% of the loan value. These cost reductions will save the typical home owner about $3,000 on fees.

Qualifying for the new FHA Streamline

The qualifications for the new FHA streamline refinance initiative are almost identical to the requirements for the old refinance program. In order to qualify, borrowers must first have an FHA home loan. Non-FHA loans will not qualify for this refinance. Additionally, borrowers must be current on their home loan and have had the loan for at least 12 months. The loan must also have been endorsed on or before May 31, 2009.

Some of the best benefits of the streamline refinance are that it is designed to be approved very quickly. Qualifying borrowers who apply for a streamline refinance are allowed to refinance their home loan to a lower rate without any qualifying checks. The program allows borrowers to refinance without a credit check, income verification, employment verification, or home appraisal. The original home appraisal price is used to determine the new loan rate, and dropping the need for a home appraisal saves time and money.

The FHA estimates that there are currently over 3.4 million households in the US that have a loan interest rate of at least 5% that would qualify for the new streamline refinance program. This is an estimated savings of over $3,000 a year, or $250 a month for those who qualify for and take advantage of this program. In addition, because the FHA guarantees the PMI on these properties, there is no additional underwriting required, saving even more time and money.

The new streamline refinance program does not allow for cash-out refinance options, but it does allow for homeowners to save hundreds each month on their home loans. Apply now and see how much you can save.

Have questions about a home loan here in Maricopa County? Contact Scott for help today.

We love posting the letters and emails we get from our happy customers. Here is one from a happy client who worked with Scott Smith:

To Whom It May Concern:

I want to thank Scott Smith for the hard work he put into qualifying and securing a loan for us on behalf of Academy Mortgage. Given our unusual situation, another lender was unable to figure out our cash flow situation and told us we could only qualify for a fraction of the amount that we knew were actually able to qualify for.

Being that we have purchased several properties and have also refinanced a few of these properties over the past several years, we have dealt with many lending institutions. I have to say that dealing with Scott and Academy Mortgage has been the most positive experience we have ever had with a lender.  The communication was excellent (we have had loan officers before that we thought had forgotten that we even existed). We always knew exactly were we were in the process. In addition, we received a very competitive rate from Academy Mortgage.

Scott is very personable and feels like an old friend. He is on top of his game. Scott has instilled confidence in us and we now consider him our “go to” guy for our future mortgage needs. I highly recommend you give him a call if you are in need of a mortgage.

~ M. Dampier

Have questions about a home loan here in Maricopa County? Contact Scott for help today.

In the current real estate market in Phoenix, many homes for sale are either owned by a bank who has gotten the home back in a foreclosure or are a short sale where the homeowner is hoping to avoid foreclosure.

And many times with bank-owned homes or short sales, the home is in need of a few repairs – ranging from an AC repair to a completely new roof – and everything in between.

So when it comes to buying these bank-owned homes or short sales, because so many are in need of at least a few repairs, the FHA 203k loan program is more popular than ever.

A few common questions about the FHA 203k loan include:

How much do I write the sales contract for?
The offer is the purchase price of the home only. Do not include the cost of repairs anywhere in the sales contract or offer.

How much money can I use for repairs with the Arizona FHA 203k loan?
The minimum that FHA will allow you to spend is $5,000 and the maximum allowed under the Arizona FHA 203k streamline program is $35,000.

Does the house need to be FHA qualified?
Not until after the work is completed. The FHA 203k streamline loan is designed to help properties that are not currently qualified, actually become qualified with the needed repairs.

Is this loan harder to qualify for than a traditional FHA loan?
No. The requirements to qualify are the same as a traditional FHA loan. What does it take to qualify for an FHA loan? Generally speaking, a credit score above 620, a good job and a down payment of 3.5%. Of course there are more details to qualifying, but those are the general highlights.

How do I go about contracting the work?
It is recommended that you work with a general contractor that can perform all construction tasks. We can easily help recommend one – we know a few great ones. It is also important that the contractor be experienced in FHA guidelines so that they can include any FHA required items in their contract.

Still Have Questions About The Arizona FHA 203k Loan?
Contact us – we are happy to help and have experts on staff who do FHA 203k loans all the time.

As many as three million borrowers with government-insured mortgages may be eligible for lower borrowing costs when they participate in streamlined Federal Housing Administration (FHA) refinancing, according to the White House Administration on Tuesday, March 6.

The fresh round of changes from the administration affects loans the Federal Housing Administration insures and would reduce fees on those mortgages for borrowers previously unable to borrow at lower rates.

Those using the so-called “streamline” refinance program allows FHA borrowers to win new FHA-backed loans without going through some of the more stringent guidelines that make locking into new loan terms more challenging.

The Obama administration said it will lower the costs on up-front mortgage insurance premiums to 0.01 percent for streamlined refinancings of FHA loans. The White House also said it will cut the annual fee for these refinancings in half to 0.55 percent.

Eligible borrowers for the streamline refinance program must have taken out those FHA loans before June 1, 2009.

The changes to the government’s streamlined refinancing program could help the typical FHA borrower find “significant monthly savings,” according to the administration.

Since mortgage rates are at historic lows and hover around 4 percent, the administration estimates a typical FHA borrower with $175,000 outstanding on their loan could reduce monthly payments to $915 a month and save $100 a month more than the borrower would have under current FHA fees.

Many people who live in Arizona have went through a short sale in the last few years and are now wondering “how long after a short sale can I get a new mortgage?”

In the case of Sharon Johnson-Smith, Academy Mortgage and Steve Alonso were able to get them into a new home with financing only one year after a short sale.

Have you had a short sale in the past and now want to get a mortgage? Contact Steve today to find out how.

Get a Mortgage One Year After a Short Sale

From: Sharon Johnson-Smith
To: Steve Alonso
Sent: Friday, January 13, 2012 11:12 AM
Subject: Endorsement

Hi Steve,

Here is our endorsement – and we mean it sincerely. -Sharon and Pinkie.

—–
And they said it couldnt be done My husband and I began to have our doubts, but Steve Alonso pulled it through.

We are elated about being able to get financing on a home after only ONE year since our short sale closing.

I was particularly doubtful after talking with several other realtors who were sure that it takes 2-3 years after a short sale before any lending institution will finance a mortgage.

I had serious second thoughts about going through with purchasing our new home, after talking with a couple of mortgage brokers who saw it highly improbably we would get financing this year.

However, Steve with his This will be done, attitude, actually did it. Thank you Steve for performing what was considered an impossible feat!

Sharon Johnson-Smith, REALTOR
480-893-0600
Fax:888-400-1956
West USA Realty
sjsmith100@hotmail.com
sjsrealestate.listingbook.com