If you are looking to consolidate mortgages or pull equity (cash) out of your home here are some of the options that are available to you:
Conventional Mortgage
On a conventional mortgage you can finance up to 80% of the current homes value. The loan proceeds can be used to payoff any outstanding mortgage and/or home equity loans as well as taking equity for consolidating other debts, tuition, vacations, etc. Loans are available up to $417,000.
Terms available on a Conventional mortgage will vary depending on the amount of equity you have and your credit score.
FHA Mortgage
The maximum advance on an FHA mortgage can vary depending on the characteristics of your loan. Loans are limited to $271,050. Here are the general guidelines:
If you are strictly combining a first and second mortgage (home equity loan) and the second mortgage has been in place for at least 12 months. You are able to refinance the two loans and roll in your closing cost up to a total of 97.75% of your homes current value (some restrictions may apply). You cannot combine both loans and take cash/equity out of the home and go to 97.75%.
If you are combining loans and/or taking cash/equity out of the home you are able to do so provided you do not exceed 85% of the homes current value. The loan proceeds can be used for anything you would like.
FHA mortgages require Mortgage Insurance as well as an escrow account for taxes and insurance.
If you would like to refinance and are not looking to borrow additional cash/equity and/or combine mortgages, you may be better suited for the options provided by President Obama's Homeowner Affordability plan. Please click here for details on those options.
New Refinance Options Available!
The media has had much to say about President Obama's Homeowner Affordability Plan. I wanted to try and provide a brief yet understandable summary of how this plan may benefit you.
These loans are NOT for borrowers looking to combine a first and second mortgage or borrow equity to consolidate other debts. If you are looking to combine your loans or pull equity out please click here
Here are some of the key bullet points that you should be aware of:
These loans are NOT for borrowers looking to combine a first and second mortgage or borrow equity to consolidate other debts. If you are looking to combine your loans or pull equity out please click here
Here are some of the key bullet points that you should be aware of:
- If when you took your original mortgage you had 20% equity and No PMI (Private Mortgage Insurance), you are able to refinance your new mortgage for up to 105% of what your home is currently worth with no need for PMI. However, most lenders may require that you now escrow for taxes and insurance if you don't currently.
- If you had less than 20% equity you likely had PMI of some type. Keep in mind that many loans that were sold as "NO PMI" in exchange for a slightly higher rate did have what was known as Lender Paid Mortgage Insurance. You are also eligible to refinance your mortgage without the need for a new PMI policy (the existing policy is carried over to the new loan, with a slight modification of terms in some cases) provided that the new mortgage balance does not exceed 105% of the home's current value.
- If you took a first and second mortgage to purchase your home and avoid PMI insurance you are not able to combine the loans into one new loan. The second mortgage must stay how it is currently. Depending on who holds your second mortgage you may have difficulty in refinancing as the second mortgage holder must agree to remain in a second position behind your new mortgage. You are eligible to refinance your mortgage with a second mortgage in place provided your new mortgage balance does not exceed 105% of the homes value. There is no limit on the total of both loans combined
- If you took out a second mortgage after you purchased your home, you are not able to combine both loans into one new loan. The current second mortgage holder must agree to remain in a second position or you would not be able to refinance. Your first mortgage can be for up to 105% of the homes value. There is no limit on the total of both loans combined.
- As a reminder "Home Equity Loans" and "Home Equity Lines of Credit" are second mortgages as they are secured by a second lien against your home.
The terms and options available to you will depend on who the owner of your mortgage is. Because most mortgages are owned by Fannie Mae and Freddie Mac, the owner of your mortgage can make a difference.
- If you are currently making your mortgage payments to First Place/Franklin Bank we are able to assist you with your options as we deal directly with Fannie Mae and Freddie Mac on all loans that we service. This gives us a tremendous amount of flexibility in assisting you.
- If you are NOT currently making your payment to First Place/Franklin Bank and you need the flexibility provided by this new program, we are only able to assist you if your loan was sold to Fannie Mae and your original mortgage balance was for 80% or less of the sales price/appraised value when you took your mortgage.
- If your loan was sold to Freddie Mac and you desire to take advantage of this new program and it's flexibility you must go back to your current loan servicer. Unless First Place/Franklin Bank is your current loan servicer we would not be able to assist you.
- If you would like to refinance and do not need the flexibility provided by this program we are able to assist you irregardless of who your current mortgage holder is and look forward to the opportunity to serve you.
To check and see if Fannie Mae or Freddie Mac owns your mortgage please use the following two links. When entering an address, please try multiple time. If your address is 123 Main Street. You will want to input:
123 Main Street
123 Main ST
123 Main
Believe it or not, a simple ST at the end of the address can make a difference in determining whether or not a loan is held by Fannie or Freddie.
Fannie Mae Loan Look Up - Freddie Mac Loan Look Up
Additional information about the Presidents plan can also be found by visiting the Making Home Affordable website.
If you are not eligible for one of these refinance options and you are in danger of losing your home because of a loss of income and/or a decrease in income, options may be available to assist you in keeping your home. Please contact your current mortgage servicer as soon as possible. The sooner you contact your lender the sooner they can assist you in trying to keep your home.
My team and I are available to assist you. Because of the large influx of applications recently. Please be patient as we do our best to reach every client who has made an inquiry about refinancing.
Please don't hesitate to contact us with any questions. Please make sure to include both a daytime and evening telephone number for us to reach you back at.
Here are some other blog post on refinancing you may find helpful:
Refinancing Questions and Answers (Audio Broadcast)
Refinancing Questions and Answers
What Are Mortgage Rates
Refinancing to Combine Mortgages or Take Cash Out
Buying or Selling a Home - Q&A Broadcast
Here are two recent interviews I did with Rebecca Perkins from Five Star Real Estate. One interview is on Selling Your Home and the other is for First Time Buyers. Please feel free to call with any questions or concerns. Enjoy!
Will Mortgage Rates Hold?
Provided compliments of Market Alert:
Another day - same old story. The direction of mortgage interest rates is being dictated by trading action in the stock markets. Since Friday, February 20th I have been writing in this space about a stock market plunge and the resulting support for the prospects of steady to fractionally lower mortgage interest rates it would create. In my judgment we are currently in the "sweet-spot" in terms of the amount of support mortgage interest rates can expect as a result of the swoon in global stock markets. Before the month is over I believe the worst of the sell-off in the stock markets will have passed
As you undoubtedly know, markets are made up of both buyers and sellers. No matter how strong the desire to sell or buy may be -- the transaction can not be completed without the opposing party directly participating in the transaction. The "so what" factor here is extremely important. Consider this, once all the sellers have been indentified and satisfied, that only leaves one component in the market place. Active and aggressive buyers . who suddenly realize they have the opportunity to acquire stocks at the low point in the market cycle. This market dynamic has never failed before . and it will not fail this time around.
Against this backdrop the Treasury department will be looking to issue a river of $2.5 trillion of debt. Without the "flight-to-quality" support of capital fleeing the volatility of the stock markets for the relative save harbor of the Treasury market - treasury yields will rise and drag mortgage interest rates higher as they go.
My sincere hope is that an increasing number of your clients will come to see the greatest mortgage financing opportunity in a generation is now available. There is an old Chinese proverb that says, "Ever banquet must come to an end." The same can be said for cycles favoring lower mortgage interest rates.
Another day - same old story. The direction of mortgage interest rates is being dictated by trading action in the stock markets. Since Friday, February 20th I have been writing in this space about a stock market plunge and the resulting support for the prospects of steady to fractionally lower mortgage interest rates it would create. In my judgment we are currently in the "sweet-spot" in terms of the amount of support mortgage interest rates can expect as a result of the swoon in global stock markets. Before the month is over I believe the worst of the sell-off in the stock markets will have passed
As you undoubtedly know, markets are made up of both buyers and sellers. No matter how strong the desire to sell or buy may be -- the transaction can not be completed without the opposing party directly participating in the transaction. The "so what" factor here is extremely important. Consider this, once all the sellers have been indentified and satisfied, that only leaves one component in the market place. Active and aggressive buyers . who suddenly realize they have the opportunity to acquire stocks at the low point in the market cycle. This market dynamic has never failed before . and it will not fail this time around.
Against this backdrop the Treasury department will be looking to issue a river of $2.5 trillion of debt. Without the "flight-to-quality" support of capital fleeing the volatility of the stock markets for the relative save harbor of the Treasury market - treasury yields will rise and drag mortgage interest rates higher as they go.
My sincere hope is that an increasing number of your clients will come to see the greatest mortgage financing opportunity in a generation is now available. There is an old Chinese proverb that says, "Ever banquet must come to an end." The same can be said for cycles favoring lower mortgage interest rates.
Finally Some Good News - Homeowner Affordability/Stability Plan
Finally some good news for homeowners. Under President Obama's Homeowner Affordability and Stability plan many American households may no longer be trapped in their current mortgage.
The President's plan features two options:
Option 1:
Homeowners who are current on their mortgage payments but may be trapped in their current mortgage because of a lack of equity due to falling home prices may now have the ability to refinance their home even if they have little to no equity. This is true even if you have an existing second mortgage.
Option 2:
The other option is for homeowners who are past due or are in danger of becoming past due (yes, there is a test and you do have to prove you are in danger of becoming past due). These homeowners may be eligible to have their existing home modified to assist them in preserving their homeownership. This program is not for those who are making payments on time and have the ability to repay the loan. Only borrowers with a true legitimate bonafide hardship will be eligible for a modification (yes, you must prove a bonafide hardship).
These programs are only available to homeowners who have a first mortgage that is owned by Fannie Mae or Freddie Mac. The majority of home mortgages in the U.S are owned by Fannie or Freddie. The program does NOT apply to those who have Sub Prime, FHA/VA or other programs. However, it is expected that most Government programs (FHA/VA/Rural Housing) will make similar changes as well.
So the question is who qualifies and what are the details? The truth is the options and guidelines available to you depend on the investor for your mortgage (Freddie, Fannie or other) and a number of other factors. The truth is both Freddie and Fannie have slightly different guidelines between them.
I will be posting a new Q&A audio broadcast within the next couple of days. Please check back soon for additional information as the details of the program were just released on 3/4/09 and it will not be available for new loans to close until 4/1/09. Because the program was just released there are still questions on some of the guidelines. We will be posting a detailed audio cast within the next couple of days that will cover the most common questions.
My practice is able to help you determine your options. However, please be patient as this new program has generated substantial interest and our ability to respond to every inquiry quickly is slightly impaired.
Might I ad that now is not the time to trust your mortgage to an amateur. Truth be told most lenders are not familiar or competent to handle these new transactions. This will create frustration and lost opportunity for you.
With over 18 years experience, I have been recognized as an expert in my field and have been featured in and written for various trade magazines. At the end of the day, we have the expertise to insure you have the best options available to preserve your home and help insure you save money.
The President's plan features two options:
Option 1:
Homeowners who are current on their mortgage payments but may be trapped in their current mortgage because of a lack of equity due to falling home prices may now have the ability to refinance their home even if they have little to no equity. This is true even if you have an existing second mortgage.
Option 2:
The other option is for homeowners who are past due or are in danger of becoming past due (yes, there is a test and you do have to prove you are in danger of becoming past due). These homeowners may be eligible to have their existing home modified to assist them in preserving their homeownership. This program is not for those who are making payments on time and have the ability to repay the loan. Only borrowers with a true legitimate bonafide hardship will be eligible for a modification (yes, you must prove a bonafide hardship).
These programs are only available to homeowners who have a first mortgage that is owned by Fannie Mae or Freddie Mac. The majority of home mortgages in the U.S are owned by Fannie or Freddie. The program does NOT apply to those who have Sub Prime, FHA/VA or other programs. However, it is expected that most Government programs (FHA/VA/Rural Housing) will make similar changes as well.
So the question is who qualifies and what are the details? The truth is the options and guidelines available to you depend on the investor for your mortgage (Freddie, Fannie or other) and a number of other factors. The truth is both Freddie and Fannie have slightly different guidelines between them.
I will be posting a new Q&A audio broadcast within the next couple of days. Please check back soon for additional information as the details of the program were just released on 3/4/09 and it will not be available for new loans to close until 4/1/09. Because the program was just released there are still questions on some of the guidelines. We will be posting a detailed audio cast within the next couple of days that will cover the most common questions.
My practice is able to help you determine your options. However, please be patient as this new program has generated substantial interest and our ability to respond to every inquiry quickly is slightly impaired.
Might I ad that now is not the time to trust your mortgage to an amateur. Truth be told most lenders are not familiar or competent to handle these new transactions. This will create frustration and lost opportunity for you.
With over 18 years experience, I have been recognized as an expert in my field and have been featured in and written for various trade magazines. At the end of the day, we have the expertise to insure you have the best options available to preserve your home and help insure you save money.
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