Should you do a ‘cash-in’ refi?; St. Louis Mortgage Interest Rate Update

Over the past years, many of Americans pulled money out their homes through “cash-out” refis.  Today, many of my clients are bringing cash into their refinance transactions.  Money is flowing in the opposite direction.

You might consider bringing cash to close your refinance to:

1.  Lower your mortgage rate:  If your LTV is close to the 80% Loan to Value (LTV) threshold, then bringing money to the table to push your LTV below 80% can get the borrower a better rate. Continue reading “Should you do a ‘cash-in’ refi?; St. Louis Mortgage Interest Rate Update

FHA Offers Alternative For Underwater Homeowners

Dennis Norman

Last week HUD announced changes to FHA home loan programs to provide refinancing options to homeowners who owe more than their home is worth. Under FHA’s new plan, existing underwater homeowners can refinance their existing non-FHA loan into a FHA loan as long as they are current on their loan and their current lender reduces their total mortgage debt by at least 10 percent of the loan amount.

The total mortgage amount for the borrower after refinancing cannot be greater than 115 percent of the current value of the home, bring the loan amount for an underwater borrower closer to the actual value of their home. I don’t believe this program is actually in effect yet, but it should be within the next few months.

Program highlights:

  • Existing loan must not be FHA-insured
  • Esiting lender must agree to writedown the principal loan balance a minimum of 10 percent and the final loan amount cannot exceed 115 percent of the current value of the home (including and second mortgages). The refinanced FHA loan cannot be greater than 97.75 percent of the value of the home.
  • The refinanced FHA loan will be on standard FHA terms
  • Existing lenders can retain second mortgages on the property, but only up to a combined 115 percent of the current value of the home.

Homeowner Eligibility:

  • Homeowners must be current on thier mortgage payments
  • Homeowner must occupy the home as their primary residence
  • Homeowners must qualify for new FHA loan under standard FHA borrower guidelines
  • Homeowners must have a FICO credit score of at least 500

I will write more about this program and give more details as they become available.

Mortgage Programs Fall Short in Keeping Homeowners out of Foreclosure

To alleviate some suffering by homeowners, the Obama Administration introduced the “Making Homes Affordable” plan last March. Unfortunately, the plan has not yet had the intended effect.

Article by the Grand Law Firm

Economists debate whether or not the country is actually currently in a recession. Some say that there are positive signs that we have reached the bottom and the economy is turning around. Others, however, suggest that the country still has a long way to go and it may be years yet before we truly reach financial recovery. Regardless of who is right though, one thing is clear: many people are facing significant financial hardships and need help now. Continue reading “Mortgage Programs Fall Short in Keeping Homeowners out of Foreclosure

Refinancing borrowers choose fixed-rate loans over ARMS

Freddie MacFreddie Mac announced that in the second quarter of 2009, refinancing borrowers overwhelmingly chose fixed-rate loans, regardless of whether their original loan was an adjustable-rate mortgage (ARM) or fixed. In fact, ninety-nine percent of prime borrowers who originally had a conforming ARM selected a new conforming fixed-rate mortgage when they refinanced.

While 30-year fixed-rate mortgages still tend to be the preferred loan, more borrowers are choosing 15-year fixed-rate loans than before. “When interest rates hit very low levels for fixed-rate mortgages, borrowers often take tis opportunity to lower their interest rate and shorten their loan term,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “In April mortgage rates reached new lows for both 15-year and 30-year fixed rate loans. Many borrowers could shorten their loan terms without having a big increase in their mortgage payments, thereby building equity faster, reducing the total interest paid over the life of the loan, and ensuring that their loan is largely paid off by their retirement.”

Mortgage information and advice from a St. Louis Mortgage Banker – Final post of the series

Dennis Norman

Dennis Norman

By: Dennis Norman

Today we pick up where we left off yesterday with my E-View TM with respected mortgage banker, H. John Frank, President of Paramount Mortgage Co. here in St. Louis.

If you missed part one, two, or three, there are links to both at the end of this post. And now, the final part of the E-View TM:

Q-This is a good time probably to address the Internet. There appear to be hundreds of lenders on the Internet for the consumer to choose from in addition to their local lenders.
Do you think there is cause for concern for a borrower in dealing with an Internet based company that does not have a physical location in their market? Or should they treat that type of company the same as a local company when checking them out to consider as their lender?

H. John Frank, Jr., President, Paramount Mortgage Co.

H. John Frank, Jr., President, Paramount Mortgage Co.

A-When you deal with a local lender or someone you have previously dealt with, you can always go into their office and discuss the problems or hopefully a local representative will be at the closing to go over the numbers with you and correct any mistakes or changes that have occurred. Continue reading “Mortgage information and advice from a St. Louis Mortgage Banker – Final post of the series