Tuesday, October 29, 2013

The Power of Pinterest


Pinterest, the social media phenomenon, has created the Web’s new design paradigm — and maybe the greatest selling engine ever devised for your Real Estate business. 


Monday, October 28, 2013

Playing the Harp 3.0 for more Americans?

For today's contract rates, without much fanfare could carry a leap forward. Plus the regular lodging and monetary information set for discharge, the Federal Open Market Committee (Fomc) has a booked, two-day gathering - its seventh of the year.

The Fomc is the sub-bunch inside the Federal Reserve which votes upon U.s. money related strategy.

At its gathering, the Fomc is required to vote on holding the Fed Funds Rate close to 0.000%; and to create an impression on what's to come for its Qe3 program. It's this second piece which remains critical to what's to come for low contract rates.

Qe3 is a project by which the Fed buys $40 billion of contract upheld securities on the open showcase month to month, making overabundance request that holds contract bond costs lifted.

With popularity comes low rates.

Qe3 started in September 2012. No astonish, then, that inside weeks of Qe3's begin, contract rates had dropped to the most reduced levels ever.

Inside a two-month period, normal 30-year contract rates leaped from 3.32% to 4.57% - the quickest two-month hop in the history of U.s. rates.

Since the surge, however, the economy has done small to show that Qe3 might as well end. Work development is slower-than-wanted; lodging markets have cooled; and, shopper using has neglected to keep up. The economy is broadening, the Fed has said, however excessively gradually to warrant a change in course.

How the Federal Reserve portrays what's to come for Qe3 will be the enormous news without much fanfare.

With the right dialect from the Fed without much fanfare, sub-4 percent rates get conceivable.

Here is the week's finished budgetary datebook :

There are additionally numerous Treasury barters which can impact the bearing of contract rates. This is in light of the fact that interest for U.s. Treasury obligation regularly corresponds to interest for contract upheld bonds. High closeout request has a tendency to bring about easier U.s. contract rates.

Additionally without much fanfare, mortgage holders think about whether Congress at long last passes Harp 3, or if the Federal Home Finance Agency (Fhfa) will only hurry up and pass Harp 3 itself.

The Fhfa has this right and, a week ago, utilized its benefit to stretch the Home Affordable Refinance Program to incorporate more U.s. family units. Perhaps you're around them?

Otherwise called #myrefi and "A Better Bargain For U.s. Property holders", Harp 3 might be the third emphasis of the prominent Home Affordable Refinance Program which was started in promptly 2009. property holders have utilized Harp to refinance to lower contract rates since the project's initiation.

It's obscure what Harp 3 will incorporate, yet there is theory that the accompanying improvements could be incorporated with Harp's most recent discharge :

Harp 3 may change the system cut-off date to incorporate more property holders

Harp 3 may permit bigger advance sizes of up $729,750

Harp 3.0 is as of now in council in Congress. Then again, the Fhfa might choose to upgrade Harp without a congressional vote. There's point of reference for it, too - its the way Harp 2 was conceived. The Fhfa instituted the change and discharged it to general society.

Provided that Harp 3 passes, a large number of U.s. mortgage holders might be in a flash Harp-eligible.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.

Thursday, October 24, 2013

Playing the Harp

The Home Affordable Refinance Program is almost 5 years of age. It was initially presented in March 2009 as a component of that year's financial boost, and will be accessible through the system's December 31, 2015 finish date.

Harp is touted as the "underwater contract". It makes today's low contract rates accessible to property holders whose homes have lost worth since buy.

When it was initially started, Harp was convenient. Home estimations were sinking as quick, as were contract rates. Mortgage holders with Fannie Mae- and Freddie Mac-supported contracts, notwithstanding, were unable to refinance. They needed sufficient home value to fit the bill for an advance.

Harp contract guidelines taught banks to ignore a property holder's advance to-worth (Ltv) and to refinance their home credit at any rate.

Interestingly, Harp was not charged as a lodging market boost be that as it may, rather, an investment one. The legislature's objective with Harp was to help customer using.

By giving U.s. mortgage holders access to lower contract rates and installments, the administration placed that families might have more accessible cash to use on merchandise and administrations.

What amount of additional? What about $21 billion, in view of two legislature asserts about Harp. To begin with, that the system might safeguard the common U.s. family $3,000 yearly; and, second, that it might achieve 7 million families across the nation.

Two years later, however, it was clear Harp might miss the point of its 7-million target. To put the Home Affordable Refinance Program in the hands of additional mortgage holders then, in late-2011, Fannie Mae and Freddie Mac started lifting project confinements.

Gone was the necessity that Harp advances top at 125% Ltv. Headed off was the prerequisite to utilize your same contract adjusted. Gone was the confirmation of wage, holdings and credit. Through "Harp 2.0", property holders could refinance at any Ltv with any contract moneylender with fewer jumps.

The system exhaust a bizarre similarity to the Federal Housing Administration's Fha Streamline Refinance and the Department of Veterans Affairs' Va Streamline Refinance.

Harp was updated as the "streamline" tried and true refinance and, under the Harp 2 guidelines, there have been an extra 1.7 million closings.

Presently - again - Fannie Mae and Freddie Mac are tinkering with Harp.

They've as of recently amplified the project due date by two years not long from now to December 31, 2015. Presently, they're overhauling the system's qualification necessities. It's an alternate little venture around the arrival of Harp 3.

Redesigned Harp Eligibility Requirements

Contract rates today are lower than the administration ever anticipated. Accordingly, today's Harp-refinancing property holders are sparing more cash than the definitive projections ever anticipated they might.

At today's low rates, for instance, to meet "$3,000 in yearly reserve funds", your unique contract credit size might need to have been $163,000. This is a minor rate of the U.s. populace. Numerous mortgage holders obtain more than that and, provided that you credit size was greater, your investment funds are greater, as well.

A mortgage holder whose unique advance size was $250,000 could utilize Harp to recover $4,800 for every year, and a property holder whose unique credit size was $400,000 can safeguard $8,000 yearly.

In spite of these profits, Harp refinance volume has regulated across the country.

In August, the amount of Harp contracts tumbled to its least focus since the launch of Harp 2.0 and engage in the system seems to fading. Likely, this is a consciousness issue on the grounds that there are a huge number of U.s. family units still qualified to Harp.

Perhaps you're around them. The qualification necessities for Harp are fundamental :

1.    your credit must be sponsored by Fannie Mae or Freddie Mac

2.    your contract note date must be on, or some time recently, May 31, 2009

3.    your credit must be present, with no "late pays" in the most recent 6 months

Past that, Harp guidelines are comparative to other streamlined refinance advances - documentation prerequisites are fewer, examinations might be skipped, and guaranteeing turn times have a tendency to be speedier.

Unless volume increments, however, its likely that Harp 2.0 will be patched up much like its antecedent.

Harp 3 could emphasize a group of progressions incorporating opening the project to non-Fannie Mae and non-Freddie Mac mortgage holders; enlarging the system's begin date from May 2009 into 2011; and, permitting the "Re-Harp" of an existing Harp home advance.

A Harp 3.0 bill is at present in board in Congress. Fannie Mae and Freddie Mac could sit tight for its entry, or discharge extra Harp redesigns on their own.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.

Tuesday, October 15, 2013

2nd Mortgage vs Heloc

Now is the ideal time for an alternate portion of "contract match-ups."

Today's match-up: "Second contract vs. home value credit."

This is an epic encounter of the lesser liens, which while subordinate to their first contract brethren, can even now hold their own in a battle.

Yet in this duel, we're likely accomplishing more to "clear things up" than we are thinking about two credit programs.

Are second contracts and home value credits the same?

You see, when it descends to it, most second contracts are home value credits. Also the other way around.

So assuming that you hear somebody discussing one or the other, they could be discussing the same thing.

This is further entangled by the way that most home value advances are Helocs, or home value lines of credit.

Befuddled yet?

You ought to be, recognizing the uncertainty of everything… wouldn't it be great if we could separate it.

Second Mortgages, Helocs, Home Equity Loans

A second contract is any home credit that is subordinated behind (comes after) a first contract.

This could be a Heloc or a home value credit.

A Heloc, as awhile ago said, is a line of credit. As such, you get a home credit with a certain line of credit, or draw measure, which you can utilize sort of as a charge card.

Helocs are attached to the variable prime rate, and hence are movable rate contracts.

After the draw period, the measure drawn upon must be paid once again throughout the reimbursement period.

*note that while a Heloc is regularly utilized as a second contract, it can additionally be a stand-alone first contract, taken out by the property holder when their contract is liberated, or to refinance an existing lien.

At long last there's the home value advance, which can allude to both a Heloc or a shut end second contract.

A "shut end second contract" is a home credit that works comparably to a first contract in that its a settled measure, not a line of credit.

Furthermore, it might be a settled rate contract or an Arm. These are regularly taken out as an elective to a Heloc, particularly as buy cash second contracts.

For instance, a borrower can abstain from paying contract protection by taking out a first contract at 80 percent advance to-quality and a simultaneous second contract for the remaining 20 percent.

Tragically, numerous banks and contract loan specialists utilize the expression "home value credit" and "Heloc" reciprocally, adding to the perplexity.

To guarantee you truly get what you want/need, ask the advance officer or contract intermediary to clarify

Thursday, October 10, 2013

Purchase "bad appraisal" now what?

What Happens When A Home Appraises For Less Than Its Purchase Price?

Another home appraisal function is to help set your downpayment amount on a purchase.
Mortgage lenders use home appraisals as the "value" portion of the your mortgage's loan-to-value (LTV) calculation, where "value" is equal to the lower of your home's purchase price or its appraised value.
For example, if you purchase a $410,000 condo in Chicago, Illinois with an appraised value of $400,000, and you plan to make a 3.5 percent downpayment via the FHA, your required downpayment amount is fourteen thousand dollars.
Conversely, if your home appraises for more than the purchase price, the required downpayment amount is $14,350.
When your home appraises for less than its purchase price, there are three potential outcomes :
  1. Buyer and seller renegotiate a new, lower home sale price
  2. Buyer increases downpayment to meet new LTV and downpayment minimums
  3. Buyer chooses neither option, and cancels home purchase contract
The possibility of a "bad appraisal" is among the reasons why the majority of home purchase contracts are written with an appraisal contingency. In the event that the home fails to appraise for its purchase price, the contingency clause gives buyers an opportunity to re-evaluate.
Appraisal contingencies are also sometimes used to renegotiate or exit contracts after an appraiser identifies required repairs, such as chipped paint or cracked windows.

How Much Home Can You Afford?

For today's home buyers, a home's appraised value is unlikely to fall short of its sale price. This is because buyers and sellers are more savvy about the "going price of a home" in 2013, and because U.S. housing markets have exhibited steady growth since late-2011.
Home appraisers are likely to consider both factors when assigning a home's Fair Market Value.
If you plan to buy a home in 2013 or 2014, consider your household budget and your expected home downpayment. An appraisal can change your math, and so can rising home prices. See how much home you can afford -- it's free and there's no obligation whatsoever.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options. 

Tuesday, October 8, 2013

Harp 3.0 ready to go?

Momentum behind so-called "HARP 3.0" is now gaining steam. If the program comes to pass as part of the White House's A Better Bargain for Responsible Homeowners, here are four potential changes HARP 3 may include.

HARP Change 1 : Refinance Alt-A, Subprime Loans Via HARP

In today's mortgage market, Fannie Mae, Freddie Mac, and the FHA control more than 90% of all new mortgage origination. However, this wasn't always the case.
Last decade, non-government mortgage lenders commanded a large share of the mortgage market and Alt-A mortgages were among the most common loans they made.
Alt-A mortgages were typically referred to in acronym or shorthand :
  • SISA loans (Stated Income, Stated Assets)
  • SIVA loans (Stated Income, Verified Assets)
  • Lo-Doc loans (Low Documentation Loans)
  • No-Doc loans (No Documentation Loans)
Despite high profile default rates, there are still large numbers of "performing" Alt-A loans with Alt-A homeowners who are underwater and unable to refinance via HARP like their conforming homeowner peers.
The same is true for sub-prime borrowers who are similarly locked up.
The case for opening HARP 3 to Alt-A and subprime borrowers becomes especially clear when we consider that the 30-year fixed rate mortgage was cheaper from non-government lenders in 2005 than via Fannie Mae or Freddie Mac. Large numbers of "prime" homeowners used sub-prime loans in 2005 because the mortgage rates were cheaper.
Today, those homeowners are without ability to refinance.

HARP Change 2 : Allow Multiple HARP Refinances

Since HARP was first announced in 2009, the average 30-year fixed rate mortgage rate has dropped close to two percentage points. However, the slide below 4 percent has been a slow one.
Rates were in the 5s in 2009 and 2010; in the 4s in 2011; and in the 3s in 2012 and 2013.
As mortgage rates have dropped, hundreds of thousands of non-HARP U.S. homeowners have refinanced multiple times, lowering their respective mortgage payments up to 40 percent over the years.
HARP homeowners, on the other hand, have not been afforded this right.
The HARP mortgage guidelines state that the program may only be used one time per household. Therefore, underwater homeowners who immediately used HARP to refinance in 2009 have been unable to refinance again via HARP as rates have kept dropping.
This one-use restriction takes on added significance since the Federal Reserve launched its third round of qualitative easing (QE3) in September 2012, a program through which the nation's central banker aims to lower U.S. mortgage rates as far as possible.
Today's mortgage rates are near 4.25%. Meanwhile, homeowners who HARP-refinanced in 2009 to 5.50% are unable to "re-HARP" to something better .
Should HARP 3 pass, it could implement a feature of the popular FHA Streamline Refinance program -- it could give homeowners program-eligibility after 6 payments have been made to the bank. Until then, HARP is one-use only.

HARP Change 3 : Change Cut-Off Date From May 31, 2009

Another HARP 3 change that could put the Home Affordable Refinance Program within reach of more people would be a change in the program's cut-off date.
Currently, HARP's eligibility standards require all HARP-refinanced mortgages to have been securitized by Fannie Mae or Freddie Mac on, or prior to, May 31, 2009. This is because -- according to a Fannie Mae representative -- homeowners whose mortgages come from after this date knew what kind of housing market into which they were buying.
The inference is that HARP was conceived to help homeowners who didn't know any better.
Even so, among the homeowners who did know better, and still bought a home post May 31, 2009, the spirit of the HARP program should still apply. Many of these homeowners made 20% downpayments and those downpayments have since been lost to the housing downturn.
To help make HARP more uniform nationwide, HARP 3 could be extended to include homeowners refinancing a primary residence for which the mortgage was securitized post-May 31, 2009. There are many homeowners with mortgages from 2010 who may benefit from a HARP 3 refinance.

HARP Change 4 : Allow HARP Loan Sizes Up To $729,750

The fourth change that should be included in the HARP 3 refinance program is an allowance for "high-balance" loans in designed high-cost area.
First, some background.
Each year, the government releases its mortgage loan limits for Fannie Mae- and Freddie Mac-conforming loans. These figures that represent the maximum-sized loan that the government groups will agree to securitize. Loans which are in excess of these maximum loan limits are called "jumbo" loans.
Since 2006, the conforming loan limit for 1-unit homes has been $417,000. However, in 2009, as part of an economic stimulus plan, areas in which homes were deemed "expensive" were assigned a temporary conforming loan limit increase to $729,750 which was to last until September 30, 2011.
For two-plus years, therefore, home buyers in areas including Orange County, California; New York, New York; and Loudoun County, Virginia could finance up to $729,750 and still be within the maximum loan size limits for Fannie Mae and Freddie Mac.
Then, in October 2011, the loan limits dropped.
Homeowners in high-cost areas could no longer finance up to $729,750 with a conforming mortgage -- the limit was dropped to $625,500 -- leaving everyone in no-mans land whose conforming mortgage was started between 2009-2011 and which the remaining balance exceeds $625,500.
Furthermore, 2014 conforming loan limits are expected to be even lower.
To remedy this issue, again, HARP 3 can take a page from the FHA Streamline Refinance playbook. So long as the original loan size was within conforming loan limits at the date of original closing, and so long as the refinance doesn't include "cash out", the loan size could be approved as-is.
This change could apply to non-HARP 3 homeowners, too.

Get Ready To Move Quickly On HARP 3

It's unclear whether HARP 3 will pass via congressional mandate, or via the FHFA, but many insiders believe it HARP will pass soon. The White House continues to push for it using the #MyRefi brand name and the program has been included in the President's Better Bargain for U.S. Homeowners program.
When HARP 3 passes, it will help millions of additional U.S. households get access to today's low mortgage rates. HARP 2 made grand improvements over the original Home Affordable Refinance program. HARP 3 will likely do the same.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.    

Thursday, October 3, 2013

Good Neighbor Next Door Program


The Good Neighbor Next Door Program

As a sub FHA also promotes homeownership through its Good Neighbor Next Door initiative, a series of programs meant to revitalize eligible communities. Homes sold through the Good Neighbor Next Door program are sold at 50% discounts, a benefit which is subsidized by HUD.
The program is limited to specific properties in specific neighborhoods, and not all buyers will be eligible. Here is the FHA Good Neighbor Next Door mortgage guidelines, in question-and-answer format.
Get pre-approved as a Good Neighbor by requesting a mortgage rate.

What properties are eligible for the Good Neighbor Next Door program?

Any single-family home located within HUD's designated revitalization area are eligible for the Good Neighbor Next Door program. Revitalization areas are designated by household income, homeownership rate, and the level of area foreclosures. Properties must be HUD-owned.

Is every property sold at a 50% discount, or just some of them?

Good Neighbor Next Door homes are sold at 50% off, no matter what. All eligible homes are sold with the discount.

What is the minimum downpayment for a Good Neighbor Next Door home?

The Good Neighbor Next Door program requires a minimum downpayment of $100, if you use FHA financing. For all other mortgage types, standard downpayment requirements apply. This means that a VA loan is available with 100% financing, and that conventional loans are available with as little as 3% down.

What buyers are eligible to participate in the Good Neighbor Next Door program?

The Good Neighbor Next Door program is available to certain public-sector employees including law enforcement officers, teachers, firefighters, and emergency medical technicians.

Are all law enforcement personnel eligible for Good Neighbor Next Door?

Most law enforcement officers are eligible for the program. To qualify as a "Good Neighbor", HUD requires that law enforcement personnel be full-time employees of a federal, state or local government; or an Indian tribal government.

Are all teachers eligible for Good Neighbor Next Door?

Many teachers are eligible for the program. To be considered a "Good Neighbor", HUD requires that teachers be employed as a full-time teacher by a state-accredited public or private school that serves student from grades pre-kindergarten through 12. In addition, the school at which a teacher is employed must serve students from the area in which the HUD-offered home is located.

Are all firefighters eligible for Good Neighbor Next Door?

Most firefighters are eligible for Good Neighbor Next Door. In order to use the program, firefighters must be employed full-time by a fire department unit of a federal, state or local government, or an Indian tribal government, which serves the area in which the home is located.

Are all emergency medical technicians eligible for Good Neighbor Next Door?

Most emergency medical technicians are eligible for Good Neighbor Next Door. In order to use the program, emergency medical technicians  must be employed full-time by an emergency medical services responder unit of a federal, state or local government, or an Indian tribal government, which serves the area in which the home is located.

Do I need to use FHA financing with the Good Neighbor Next Door program?

No, buyers of homes through the Good Neighbor Next Door program are not required to use FHA financing, even though the program is HUD-sponsored. Buyers may use FHA loans, VA loans, USDA loan, or conventional loans; financing via a bank; or may pay cash for eligible homes.

Do I have to buy the home as a primary residence?

Yes. The Good Neighbor Next Door program requires that you live in the home you purchase.

How long must the property be my primary residence?

The Good Neighbor Next Door program requires that buyers occupy their home as a primary residences for a minimum of 36 months. After 36 months, buyers can sell the home, retain the home as a second home, or rent the home as an investment property without restriction.

Can I buy the home as an investment property?

No. The Good Neighbor Next Door program cannot be used for investment properties or rental homes. Program participants must agree to live in the home being purchased.

How many days do I have to "move in" after my closing date?

After closing on a home via the Good Neighbor Next Door program, you can move in within 30 days, 90 days, or 180 days depending on HUD's opinion of the home and its condition. If the home is mostly move-in ready, you will be able to move in within 30 days. If the home requires substantial repairs, you will be granted up to 180 days.

What if I move within 3 years of buying a HUD home through the program?

Buyers who move, sell, or otherwise end occupancy prior to 36 months are required to repay HUD, on a prorated basis, the amount of the home's original discount. The proration decreases by 1/36 for each month in the home. For example, if you sell your home after 24 months, you must repay 12/36, or one-third, of your original HUD 50% discount. HUD may also limit your participation in future homeownership programs.

When I sell the home after 3 years, do I get to keep 100% of the profit?

Yes, if the home is your primary residence for 36 months or more, when you sell, you are entitled to all of the proceeds from sale and all accumulated home equity. There is no repayment to HUD required whatsoever.

Do I have to use a real estate agent to buy the home?

Yes, the Good Neighbor Next Door program requires home buyers to use a real estate agent to assist with the purchase. You may also work with a real estate broker.

Do I have to be a first-time home buyer to use Good Neighbor Next Door?

No, you don't have to be a first-time home buyer to use the Good Neighbor Next Door program. However, you may not own a home at the time you submit your offer to buy a HUD-eligible home. Also, you may not have been a homeowner within the prior twelve months. For example, if you are buying a home with the Good Neighbor Next Door program today, you may not have been a homeowner at any time since October 3, 2012.

Can I buy a 2-unit, 3-unit or 4-unit home via the Good Neighbor Next Door program?

No, multi-unit homes are not available for purchase via the Good Neighbor Next Door program. Only one-unit homes are eligible. This includes single-family residences, condominiums, town homes and row homes.

How much earnest money is required with the program?

The Good Neighbor Next Door program requires every home buyer to make an earnest money deposit equal to 1% of the home's list price. This means one percent of the price before HUD's 50% discount. There are two caveats. First, your earnest money deposit must be at least $500 and must not be more than $2,000. Second, if you are awarded the home and fail to make an effort to close on it, your earnest money may be forfeited in full.

If I leave or lose my job during my first 36 months in the home, what are my obligations?

If you leave or lose your job while within the first 36 months in your home, you remain obligated to maintain the home as your primary residence. If you choose to move, sell or rent your home, you will be asked to repay HUD, on a pro-rated basis, the amount of your original property discount. For example, if your residency ends after 12 months, HUD will collect 24/36 of your original listing discount, or two-thirds.

To receive personalized rates please email me at eneal@athccorp.com with your available times to discuss your options.    

Wednesday, October 2, 2013

FHA Streamline are you aware?


What Is An FHA Streamline Refinance?

The FHA Streamline Refinance is a special mortgage product, reserved for homeowners with existing FHA mortgages. FHA Streamline Refinances are the fastest, simplest way for FHA-insured homeowners to refinance their respective mortgages.

The FHA Streamline Refinance program's defining characteristic is that it does not require a home appraisal. Instead, the FHA will allow you to use your original purchase price as your home's current value, regardless of what your home is actually worth today.

In this way, with its FHA Streamline Refinance program, the FHA does not care if you are underwater on your mortgage. Rather, the program encourages underwater mortgages. Even if you owe twice what your home is now worth, the FHA will refinance your home without added cost or penalty.
The "appraisal waiver" has been a huge hit with U.S. homeowners, allowing unlimited loan-to-value (LTV) home loans via the FHA Streamline Refinance program. Homeowners in places like Florida, California, Arizona and Georgia have benefitted greatly, as have homeowners in other states and cities affected by last decade's housing market downturn.

Beyond this "no appraisal" feature, however, the FHA Streamline Refinance behaves very much like any other loan product. It's available as a fixed rate or adjustable mortgage; it comes as a 15- or 30-year term; and there's no FHA prepayment penalty to worry about.
Another big plus is that FHA mortgage rates are the same in the FHA Streamline Refinance as with a "regular" FHA loans. There's no penalty for being underwater, or for having very little equity.
Check your FHA Streamline Refinance eligibility.

FHA Streamline : No Verification Of Job, Income, Credit

Another big plus is that the FHA Streamline Refinance is fairly easy for which to qualify.
Earlier this decade, in an effort to help U.S. homeowners, the FHA abolished most of the typical verifications required to get a mortgage. So, today, as it's written in the FHA's official mortgage guidelines :
  1. Employment verification is not required with an FHA Streamline Refinance
  2. Income verification is not required with an FHA Streamline Refinance
  3. Credit score verification is not required with an FHA Streamline Refinance
There's no need for a home appraisal, either, so when you put it all together, you can be (1) out-of-work, (2) without income, (3) carry a terrible credit rating and (4) have no home equity. Yet, you can still be approved for an FHA Streamline Refinance.
That's not as crazy as it sounds, by the way.

To understand why the FHA Streamline Refinance is a smart program for the FHA, we have to remember that the FHA's chief role is to insure mortgages -- not "make" them.
It's in the FHA's best interest to help as many people as possible qualify for today's low mortgage rates. Lower mortgage rates means lower monthly payments which, in theory, leads to fewer loan defaults.
This is good for homeowners that want lower mortgage rates and for the FHA -- but mostly for the FHA.
Check your FHA Streamline Refinance eligibility.

Are You FHA Streamline Refinance Eligible?

Although the FHA Streamline Refinance eschews the "traditional" mortgage verifications of income and credit score, as examples, the program does enforce minimum standards for applicants. The official FHA Streamline Refinance guidelines are below. Note that not all mortgage lenders will underwrite to the official guidelines of the Federal Housing Administration.

Perfect, 3-Month Payment History Is Required

The FHA's main goal is to reduce its overall loan pool risk. Therefore, it's number one qualification standard is that homeowners using the Streamline Refinance program must have a perfect payment history stretching back 3 months. 30-day, 60-day, and 90-day lates are not allowed. One mortgage late payment is allowed in the last 12 months. Loans must be current at the time of closing.
Click for your personalized FHA Streamline Refinance mortgage rates.

210-Day "Waiting Period" Between Refinances

The FHA requires that borrowers make 6 mortgage payments on their current FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.

Employment And Income Are Not Verified

The FHA does not require verification of a borrower's employment or annual income as part of the FHA Streamline process. There is no Verification of Employment, nor are there paystubs, W-2s or tax returns required for approval. You can be unemployed and get approved for a FHA Streamline Refinance so long as you still meet the other program requirements.

Credit Scores Are Not Verified

The FHA does not verify credit scores as part of the FHA Streamline Refinance program. Instead, it uses payment history as a gauge for future loan performance. This means that FICO scores below 640, below 620, below 580, and below 500 are eligible for Streamline Refis.

The Refinance Must Have "Purpose"

Streamline Refinance applicants must demonstrate that there's a Net Tangible Benefit in the refinance; a legitimate reason for refinancing. Loosely, Net Tangible Benefit is defined as reducing the (principal + interest + mortgage insurance) component of the mortgage payment by 5 percent or more. Another allowable Net Tangible Benefit is to refinance from an adjusting ARM into a fixed rate loan. Taking "cash out" to pay bills is not an allowable Net Tangible Benefit.

Loan Balances May Not Increase To Cover Loan Costs

The FHA prohibits increasing a Streamline Refinance's loan balance to cover associated loan charges. The new loan balance is limited by the math formula of (Current Principal Balance + Upfront Mortgage Insurance Premium). All other costs -- origination charges, title charges, escrow population -- must be either (1) Paid by the borrower as cash at closing, or (2) Credited by the loan officer in full. The latter is called a "zero-cost FHA Streamline".

Appraisals Not Required

The FHA isn't concerned about home value -- it's insuring your loan regardless. Therefore, the FHA does not require appraisals for its Streamline Refinance program. Instead, it uses the original purchase price of your home, or the most recent appraised value, as its valuation point. Homes that are underwater are still FHA Streamline-eligible.

FHA Streamline Refinance Mortgage Insurance Requirements

The FHA Streamline Refinance is an FHA-insured mortgage, and FHA borrowers are required to make two types of mortgage insurance payments -- an upfront mortgage insurance payment paid at closing, plus an annual payment split into 12 installments, paid with your mortgage payment each month.
With respect to mortgage insurance premiums, homeowners using the FHA Streamline Refinance program are split into two classes :
  1. Homeowners whose new loan replaces an FHA-backed mortgage endorsed prior to June 1, 2009
  2. Homeowners whose new loan replaces an FHA-backed mortgage endorsed on/after June 1, 2009.
Homeowners in the first class -- those with "old" FHA mortgages -- pay markedly lower mortgage insurance than "new" FHA homeowners.

FHA Streamline Refinance MIP (For Loans Endorsed Before June 1, 2009)

If your existing FHA mortgage was endorsed prior to June 1, 2009, your mortgage insurance premiums have been "grandfathered". You can refinance via the FHA Streamline Refinance program and pay reduced rates for both for upfront MIP and your annual mortgage insurance premium.

Upfront Mortgage Insurance Premiums (UFMIP)

For an FHA Streamline Refinance that replaces a loan endorsed prior to June 1, 2009, the new FHA mortgage's upfront mortgage insurance is equal to 0.01 percent of the loan size, or 1 basis point.
For example, if your new FHA Streamline Refinance is for $100,000 mortgage, the FHA will assess a $10 upfront mortgage insurance premium (MIP) to be paid by you at closing. The FHA automatically adds the $10 payment to your new loan balance.

Annual Mortgage Insurance Premiums (MIP)

Annual MIP is similarly cheap for "old" FHA loans. For an FHA Streamline Refinance replacing an FHA loan endorsed prior to June 1, 2009, the annual MIP is 0.55% annually, or 55 basis points.
The complete annual MIP schedule is as follows :
  • 15-year loan terms with loan-to-value over 90% : 0.55 percent annual MIP
  • 15-year loan terms with loan-to-value under 90% : 0.55 percent annual MIP
  • 30-year loan terms with loan-to-value over 95% : 0.55 percent annual MIP
  • 30-year loan terms with loan-to-value under 95% : 0.55 percent annual MIP
15-year fixed rate mortgages with LTVs of 78% or less pay no annual MIP.
For an FHA Streamline Refinance which replaces a FHA loan endorsed prior to June 1, 2009 and for which the mortgage is a jumbo FHA mortgage (i.e. loan size exceeds $625,500), no additional mortgage insurance premiums are due.
Note : FHA jumbo loans over $625,500 are permitted in "high-cost" metropolitan areas only. This includes Montgomery County, Maryland; New York City, New York; and Fairfax County, Virginia.
Most of California, Hawaii and Alaska are FHA jumbo loan-eligible, too.

FHA Streamline MIP For Loans Endorsed On/After June 1, 2009

If you are refinancing an FHA mortgage via the FHA Streamline Refinance program and your existing FHA mortgage was endorsed on, or after, June 1, 2009, your mortgage insurance premium schedule on the new loan is as follows.

Upfront Mortgage Insurance Premiums (UFMIP)

For an FHA Streamline Refinance replacing a loan endorsed on, or after, June 1, 2009, the FHA upfront mortgage insurance premium is equal to 1.75 percent of your loan size, or 175 basis points.
This is $1,750 for every $100,000 borrowed. The FHA automatically adds the $1,750 premium to your loan balance for you -- it's not paid as cash. Furthermore, not all refinancing households will pay the full amount.
For FHA-backed homeowners refinancing within the 3 years of their existing loan's start date, the FHA provides a refund on previously-paid upfront MIP. The size of the refund diminishes as the 3-year window elapses.
For example, a homeowner who refinances an FHA mortgages after 11 months is granted a 60% refund on his initial FHA UFMIP. 30 days later, the refund drops to 58%.
This is why is rarely a good idea to "wait to refinance" with the FHA. With the FHA Streamline Refinance program, the sooner you refinance, the bigger your refund, and the lower your total loan size. This lowers the monthly payment and preserves the home equity -- two huge positives.
You can review your own FHA mortgage insurance refund chart at top.

Annual Mortgage Insurance Premiums (MIP)

The annual MIP schedule for an FHA Streamline Refinance which replaces a loan from on, or after, June 1, 2009 is as follows :
  • 15-year loan terms with loan-to-value over 90% : 0.70 percent annual MIP
  • 15-year loan terms with loan-to-value under 90% : 0.45 percent annual MIP
  • 30-year loan terms with loan-to-value over 95% : 1.35 percent annual MIP
  • 30-year loan terms with loan-to-value under 95% : 1.30 percent annual MIP
Note, though, that jumbo FHA mortgages are subject to an additional MIP fee.
15-year fixed rate mortgages over $625,500 pay an additional 0.25 basis points annually. Loans with terms of 20 years or 30 years pay an additional 0.20 basis points.
A Los Angeles, California homeowner, therefore, borrowing at the $729,750 local loan limit with a 30-year fixed rate mortgage will pay annual mortgage insurance premiums of 1.55% to the FHA, or $943 per month.

FHA MIP Cancelation Policy

For some FHA-backed homeowners, annual mortgage insurance premiums are temporary. The FHA makes this determination based on the amount of home equity at the time of closing.
For homeowners using the FHA Streamline Refinance to replaces a loan from on, or after, June 1, 2009, the FHA MIP cancelation schedule is as follows :
  • Loan-to-value of 90% or less at the time of closing : MIP required for 11 years
  • Loan-to-value greater than 90% at the time of closing : MIP required for life of loan
The FHA's MIP cancelation policy is the same for 15-year loan terms as for 30-year loan terms.
Refinancing homeowners are welcome to reduce their loan balance at the time of closing to avoid paying MIP for the loan's life. In many cases, this will require an up-to-date appraisal of your home.
This FHA MIP cancelation policy applies to FHA loans beginning June 2013. Note that FHA MIP will also be canceled in the event of a refinance to a different loan program such as a conventional loan backed by Fannie Mae or Freddie Mac, or upon sale of the home.
Homeowners planning to move within 10 years may not be affected by the FHA's "Life Of The Loan" rule.

Apply For Your FHA Streamline Refinance Here

The FHA Streamline Refinance is among the easiest and best-valued mortgage products available.
If you have an existing FHA mortgage, get yourself a FHA Streamline Refinance rate quote. FHA mortgage rates are low and closings can occur in as few as 20 days. And, the faster you close, the bigger your FHA upfront mortgage insurance premium refund.