FHA VA Blog

So by now you all have heard that mortgage rates have dipped to new all time lows. As you can see it has been 29 days since I last blogged. A little because of the holidays, but lately because I have been busy taking calls from my family of clients and referrals on new clients.

Quickly, the reason rates have dipped is because the government started buying Mortgage backed securities (MBS), the first business day of this year. These are mortgages in short. They have been doing this to ease the liquidity problems of the banks. By purchasing the MBS off the banks hands , they assume it will free up the banks to lend more money and help businesses, and consumers.

Right now, if you have an FHA mortgage that you have been paying on time for the last 12 months (or if you bought or refinanced less then 12 months ago, on-time since you took out the new loan), then you are eligible for an FHA streamline refinance. This is a non-requalifying refinance offered by HUD and means no credit check, no income or employment verification , and no asset statements. So even if like one of my recent clients you are upside down on your home (but have an FHA or VA loan) you can do the streamline refinance to lower your rate! HOW? because we don't get your home appraised for the FHA or VA (version) of the streamline refinance. This is an awesome feature FHA and VA offer for their clients.

Why would you do the refinance? If you have 5.75% or higher I can show you how to save about $100,000 in interest in your loan. Even if you have had the loan for 5 years, it still makes sense to do it.

Another recent client of mine who is single had a bit of debt (You can't take out equity to pay off debt on a streamline refinance), as it is non-requalifiyng and there is no appraisal to reference. Anyway, we spent about 30-45 minutes over coffee to discuss her financial picture and how the refinance could propel her financially. Given a few variables of the refinance are a skipped payment and an escrow refund, I was able to show her how to become debt free (minus home) in 12 months.

I was digging around online for FHA rates and even on bankrate.com you only find 1 lender in Denver advertising for FHA loans. Although I don't know who they are or their FHA experience levels. That is because lenders have gone out of business left and right. Others frankly don't have extensive FHA experience.

Even with what I found online I can safely say we offer the lowest FHA rates in Denver. Being as I also run my branch I can assure you that you will get great service, care for your loan, honest advice, and low rates and competitive fees.

If you would like a few references let me know , I am sure many of my past clients would field a call to let you know how well we took care of them. Not too mention I actively monitor their loans to make sure that as I mentioned above, when I can save them $100,000 in interest I make the call and we go forward. But only when it benefits them. In this time that you are making potentially the last decision on your home to refinance at these rates, invest 30 minutes with me so I can educate you on many aspects and angles of the process and help you understand how to maximize your refinance for your overall financial picture.

It can definitely be overwhelming but let me guide you through the maze. Feel free to email with questions or call to apply.

Your mortgage guy~

Ray

 rwilliams@summit-mortgage.com,  303-779-0591 ext 101 and mention my blog, and don't forget to ask what the NO CLOSING COST OPTION really means.

I was sitting here on my couch and a few minutes ago Alan Gionet from CBS News came on and did a spot on "Is it time to refinance". He interviewed Anita Padilla, and a few homeowners about this topic.

Alan, deduced you should think about how long you plan on being in your home, and are the fees being rolled into your loan. Now while Alan would never have enough time to truly delve into this subject. He doesn't have the knowledge either. Afterall, he is just a journalist doing a story. And we all know the media focusing the majority of their time doing stories to scare us.

Anita, who worked on the task force for Colorado's legislation brought up a couple good points. She mentioned that while the low rates being advertised may sound good, you may be better off with a slightly higher rate where the lender credits you the costs for the lending and title fees. This is called a true no closing cost loan. These fees aren't added to your balance, nor do you bring them to the closing table. It is covered by the yield paid by the bank to the lender.

She didn't however, disseminate that assets, income, and appraised value is important for a conventional refinance. While an FHA or VA streamline refinance don't require asset, income or even appraisals (so equity is irrelevant).

I can tell you after having personally done a news story with Heidi Hemmet on Fox a few years back. They do edit the interviews to what they want us the consumer to hear. My story with Heidi was about the opportunities within buying a foreclosed home.

So while Anita said it makes sense to refinance if you lower your rate by .5%, this all depends on the fees. If you have to roll in your fees and start your term over, it may or may not make sense.

One homeowner they talked to said even as low as rates are he wouldn't refinance because he is getting closer to paying the house off. Well If you spend 30 minutes with the right mortgage person, you may find you could be 10 years into your loan , and it could make sense to refinance. Why? Because if you are 10 years into a 30 year mortgage and refinance into a 15 year mortgage. You will actually shave 5 years off your loan, and quite possibly end up with the same payment (due to having a lower amount financed in the new 15 year mortgage).

If you are wondering if it makes sense, just ask. I just told someone the other day it didn't make sense because she was already at 5.25% and was curious how 4.5% would look for her. It was there (the rate) if she wanted to pay 3% discount and $2500 additional fees. Would it make sense for her? NO! But we all have different situations and for the large majority it does make sense, but do your research~

Ray