If you’re underwater on your conventional mortgage loan you might be eligible to refinance without paying down principal and without having to pay mortgage insurance.

HARP originally started in April 2009. The Government calls it HARP (Home Affordable Refinance Program)  This program is also known as the Making Home Affordable plan, the Obama Refi plan, DU Refi plus

In order to be eligible for the HARP refinance program :

1. Your loan must be backed by Fannie Mae or Freddie Mac.
2. Your current mortgage must have a loan date prior to June 1, 2009.
3. Your mortgage loan must be paid on-time for the prior 6 months and with no more than 1 late payment in the past 12 months.
4. You must have not used the HARP mortgage program before, only one HARP refinance per mortgage is allowed

If you meet the above criteria, you might be HARP-eligible.

Click here for a free HARP rate quote.

Questions and Answers – HARP

How do I know if Fannie Mae or Freddie Mac owns my mortgage?

Fannie Mae and Freddie Mac have established toll-free telephone numbers and web submission processes to make this data available. Homeowners can enter information to determine if either agency owns or guaranteed the loan.

For Fannie Mae:
1-800-7FANNIE (8am to 8pm EST)
www.FannieMae.com/loanlookup

For Freddie Mac:
1-800-FREDDIE (8am to 8pm EST)
www.FreddieMac.com/mymortgage

If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?

No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.

Click here for a free HARP rate quote.

Is “HARP” the same thing as the government’s “Making Home Affordable” program?

Yes, the names HARP and Making Home Affordable are interchangeable.

What if neither Fannie Mae or Freddie Mac has a record of my mortgage?

If Fannie Mae or Freddie Mac has record of your mortgage, your loan is not HARP eligible. However, you may still be eligible for a “regular” refinance to lower rates.

If your mortgage is insured by the FHA, use the FHA Streamline Refinance program. The FHA Streamline Refinance helps underwater homeowners, too.

I currently make my mortgage payment to Wells Fargo, am I eligible for HARP?

Wells Fargo is likely just your mortgage servicer; the bank that collects your payments. Wells Fargo backs very few of its own loans. Most loans for which payments are sent to Wells Fargo are backed by either Fannie Mae or Freddie Mac.

I currently make my mortgage payment to Bank of America, am I eligible for HARP?

Bank of America is likely just your mortgage servicer; the bank that collects your payments.  Bank of America backs very few of its own loans. Most loans for which payments are sent to Bank of America are backed by either Fannie Mae or Freddie Mac.

I currently make my mortgage payment to Chase, am I eligible for HARP?

Chase is likely just your mortgage servicer; the bank that collects your payments. Chase backs very few of its own loans. Most loans for which payments are sent to Chase are backed by either Fannie Mae or Freddie Mac.

Click here for a free HARP rate quote.

Am I eligible for the Home Affordable Refinance Program if I’m behind on my mortgage?

No. You must be current on your mortgage to refinance via HARP.

What are the HARP program’s mortgage rates?

Mortgage rates for the HARP mortgage program are the same as for a “traditional” refinance. There is no premium for using the HARP program.

If I refinanced with HARP a few years ago can I use it again for HARP 2?

No, If you used HARP 1 you cannot use HARP 2.  You can only use the HARP mortgage program one time per home.

Will my home require an appraisal with the HARP mortgage program?

Most of the time we will run what’s called an “automated valuation model” (AVM) on your home. If the value meets reliability standards, no physical appraisal will be required. However, you can choose to do a physical appraisal.

Do I have to HARP refinance with my current mortgage lender?

With the Home Affordable Refinance Program, you can refinance with any participating HARP lender. Click here for a HARP rate quote.

I put down 20% when I bought my home and now I am underwater. If I refinance with HARP will I have to pay principle mortgage insurance?

No, If your current loan didn’t require PMI, your new loan won’t require it, either.

I pay PMI now. Will my PMI payments go up with a new HARP refinance?

No, your PMI payments will not increase. We will transfer your PMI to your new loan.

I have an FHA mortgage, Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for an FHA loan. If your current mortgage is backed by the FHA,  use the FHA Streamline Refinance program. Click here to read about the FHA Streamline Refinance program.

I have a USDA mortgage. Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for a USDA loan. If your current mortgage is backed by the USDA, use the USDA’s Streamline Refinance program. Click here to get USDA mortgage rates.

I have a VA mortgage. Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for a VA loan. If your current mortgage is backed by the VA,  use the VA’s IRRRL (Interest Rate Reduction Refinance Loan). Click here to read about a VA IRRRL Refinance.

What’s the biggest mortgage I can get with a HARP refinance?

HARP refinances are limited to your area’s conforming loan limits, in most cities the conforming loan limit is $417,000. There are some cities in which conforming loan limits are as high at $625,500.

Can I do a cash-out refinances with HARP?

No, only rate-and-term refinances are allowed.

Can I refinance a second/vacation home with HARP?

Yes, you can refinance a second/vacation property with HARP, even if the home was once your primary residence.

Can I refinance an investment/rental property with HARP?

Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence.

I rent out my old home. Is it HARP eligible even though it’s an investment property now?

Yes, you can use the HARP Refinance program for your former residence, even if there’s a renter there now.

Are condominiums eligible for HARP refinancing?

Yes, condominiums can be financed on the HARP refinance program.

 Can I pay off a First and Second mortgage with a HARP refinance?

No, HARP is for first liens only.  All subordinate/junior liens must be re-subordinated to the new first mortgage.

Can I include my closing costs with a HARP refinance?

Yes, mortgage balances can be increased to cover closing costs in addition to other money due at closing such as escrow reserves, daily interest, and up to $250 cash back.  Your loan size cannot exceed the local conforming loan limits.

I am now divorced. I want to remove my ex-spouse from the mortgage. Can I do that with HARP?

Yes, with HARP a borrower on the mortgage can be removed via a HARP refinance so long as that person is also removed from the deed. You must also prove that you have been making the mortgage payment by yourself for the last 12 months.

When does the HARP program end?

If you are HARP-eligible, you must close on your mortgage prior to January 1, 2014.

How do I apply for the HARP program?

Use this form to get a rate quote.  There is no fee for applying.

Apply For HARP 2.0 (Home Affordable Refinance Program)

Click here to Apply Online for a HARP refinance.

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 simplest way for FHA-insured homeowners to refinance their mortgage.

NO APPRAISAL NEEDED

The FHA Streamline Refinance doesn’t require a new Home Appraisal.  Even if you’re underwater or your home has decreased in value since your previous loan, FHA will refinance your home without added cost or penalty.

Click here to contact me with questions about your FHA Streamline Refinance.

More Benefits of the FHA Streamline Refinance

No Verification of Job or Income

FHA abolished verification for practically everything on an FHA Streamline Refinance mortgage application.  Now, as written in the FHA’s official mortgage guidelines, the mortgage approval process for an FHA Streamline Refinance says :

1. Employment verification is not required with an FHA Streamline Refinance
2. Income verification is not required with an FHA Streamline Refinance

Click here for an FHA Streamline Refinance rate quote.

Put it all together and it means that you can be out-of-work, without income, having lost all of your home equity, and you will still be approved for the FHA Streamline Refinance program.

Therefore, 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.

Are You FHA Streamline Refinance Eligible?

*  Perfect, 12-Month Payment History Is Required

*  210-Day Waiting Period between Refinances

*  Employment and Income Are Not Verified

*  The Refinance Must Have Net Tangible Benefit

Net Tangible Benefit is defined as reducing the (principal + interest + mortgage insurance) component of the mortgage payment by 5 percent or more.  Refinancing from an ARM into a fixed rate loan is an automatic 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, lender charges, title charges, escrow population,  must be either paid by the borrower as cash at closing, or Credited by the loan officer in full. This is called the NO Cost Streamline Refinance.

You could skip up to two months house payments during a refinance.  Lets say you close on April 15^th and you haven’t made your April payment yet.  The New loan will not have a new payment due until June 1^st, so you would have skipped your April and May house payment.

Click here for a zero-cost FHA Streamline Refinance rate quote.

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.  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.  Upfront mortgage insurance payment paid at closing, plus an annual one paid in 12 installments along with your mortgage payment each month.

New Changes on FHA Streamline Refinance Beginning April 9, 2012

FHA Streamline Refinances are now split into two classes :

1. Loans that replace FHA-backed mortgages endorsed before June 1, 2009.  (You need to give me a call if you have a FHA Loan Originated before June 1^st, 2009)
    
2. Loans that replace FHA-backed mortgages endorsed on or after June 1, 2009.

Refinancing an FHA originating before June 1^st 2009 has a reduced Mortgage Insurance Premiums, so if you tried to refinance recently and it didn’t benefit you, Chances are NOW I can save you money.  I have several customers in around Missouri and Arkansas that have called me to get prepared for when I start submitting streamline applications on June 11th 2012.

Click here for today’s FHA Streamline Refinance mortgage rates.

1. FHA Streamline Refinance MIP Rates (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 in the FHA Streamline Refinance program and pay reduced rates for both for upfront MIP and annual mortgage insurance premiums.

Upfront MIP

Beginning for FHA Case Numbers assigned on or after June 11, 2012, and for loans endorsed prior to June 1, 2009, the new FHA upfront mortgage insurance is equal to 0.01 percent, or 1 basis point.

So, for example, if your FHA Streamline Refinance is for a new $100,000 mortgage, the FHA will assess a $1 upfront mortgage insurance premium (MIP) to be paid by you at closing. The FHA automatically rolls the $1 payment into your new loan balance.

Yes, only $1 for your Upfront MIP, this is a huge benefit.

Click here for an FHA Streamline Refinance rate quote.

Annual MIP

Meanwhile, for FHA Case Numbers assigned on or after June 11, 2012, and for loans endorsed prior to June 1, 2009, costs for the other type of FHA mortgage insurance — annual MIP — moves to a standard 55 basis points.

The new schedule, for streamline loans endorsed prior to June 1, 2009 with case numbers assigned on or after June 11, 2012 :

• 15-year loan terms with loan-to-value over 90% : 0.55 percent annual MIP
• 15-year loan terms with loan-t0-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.

Click here for an FHA Streamline Refinance rate quote.

2. FHA Streamline MIP For Loans Endorsed On Or After June 1, 2009

If your existing FHA mortgage was endorsed on or after June 1, 2009, your new FHA mortgage insurance premiums will reflect the current MIP rates.

Upfront MIP

For FHA Case Numbers assigned on or after April 9, 2012, and for loans endorsed on or after June 1, 2009, the FHA’s new upfront mortgage insurance will now equal to 1.75 percent of your loan size.

If your FHA Streamline Refinance is for a new $100,000 mortgage, in other words, beginning April 9, 2012, it will  require a $1,750 upfront mortgage insurance premium (MIP). Upfront MIP is NOT paid with cash, FHA automatically rolls the payment into your new loan balance.

Not all FHA homeowners will pay this full amount, though. One great thing about the FHA Streamline Refinance program is that the FHA offers refund on previously-paid upfront MIP so long as you’re still within the first 3 years of your mortgage.

Note that FHA mortgages with assigned Case Numbers prior to April 9, 2012 require just a 1.000 percent upfront MIP premium.

Click here for an FHA Streamline Refinance rate quote.

Annual MIP

For FHA Case Numbers assigned on or after April 9, 2012, and for loans endorsed on or after June 1, 2009, the FHA’s new annual mortgage insurance premium are rising across the board.

The new schedule, for loans with case numbers assigned on or after April 9, 2012 :

• 15-year loan terms with loan-to-value over 90% : 0.60 percent annual MIP
• 15-year loan terms with loan-t0-value under 90% : 0.35 percent annual MIP
• 30-year loan terms with loan-to-value over 95% : 1.25 percent annual MIP
• 30-year loan terms with loan-to-value under 95% : 1.20 percent annual MIP

15-year fixed rate mortgages with LTVs of 78% or less pay no annual MIP.

Loans made prior to April 9, 2012 will use the old FHA mortgage insurance schedule :

• 15-year loan terms with loan-to-value over 90% : 0.50 percent annual MIP
• 15-year loan terms with loan-t0-value under 90% : 0.25 percent annual MIP
• 30-year loan terms with loan-to-value over 95% : 1.15 percent annual MIP
• 30-year loan terms with loan-to-value under 95% : 1.10 percent annual MIP

Note that mortgage insurance payments are included in the FHA’s Net Tangible Benefit requirement. You must lower your monthly payment by at 5 percent to qualify for the FHA Streamline Refinance.

Click here for an FHA Streamline Refinance rate quote.

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 my office underwrites and funds FHA loan in-house. This means we can close your mortgage faster.

Click here to get a rate quote

I am located in Springfield Missouri, but I am licensed to do mortgage loans throughout the 50 States.

• Mortgage rates can change daily.
• Actual payments will vary based on your individual situation and current rates.
• Lending services may not be available in all areas.
• Some restrictions may apply.
• Based on the purchase/refinance of a primary residence.
• We assumed (unless otherwise noted) that: closing costs are paid out of pocket; this is your primary residence and is a single family home; debt-to- income ratio is less than 40%; and credit score is over 720,
• The lock period for your rate is 30 days.
• If LTV > 80%, PMI will be added to your monthly mortgage payment, with the exception of Military/VA loans. Military/VA loans do not require PMI.
• For FHA loans payment includes a onetime upfront mortgage insurance premium (MIP) at 1.0% of the base loan amount and a monthly MIP calculated at 0.90% of the base loan amount. The 0.90% monthly MIP will be paid until the loan reaches 78% LTV, provided the MIP has been paid for a minimum of 5 years. Thereafter, the monthly loan payment will consist of equal monthly principal and interest payments only until the end of the loan.
• Please remember that we don’t have all your information. Therefore, the rate and payment results you see from this calculator may not reflect your actual situation. Elite Financial Group offers a wide variety of loan options. You may still qualify for a loan even if your situation doesn’t match our assumptions. To get more accurate and personalized results, please call (417) 616-0783 to talk to a loan officer.

• Mortgage rates can change daily.
• Actual payments will vary based on your individual situation and current rates.
• Lending services may not be available in all areas.
• Some restrictions may apply.
• Based on the purchase/refinance of a primary residence.
• We assumed (unless otherwise noted) that: closing costs are paid out of pocket; this is your primary residence and is a single family home; debt-to- income ratio is less than 40%; and credit score is over 720,
• The lock period for your rate is 30 days.
• If LTV > 80%, PMI will be added to your monthly mortgage payment, with the exception of Military/VA loans. Military/VA loans do not require PMI.
• For FHA loans payment includes a onetime upfront mortgage insurance premium (MIP) at 1.0% of the base loan amount and a monthly MIP calculated at 0.90% of the base loan amount. The 0.90% monthly MIP will be paid until the loan reaches 78% LTV, provided the MIP has been paid for a minimum of 5 years. Thereafter, the monthly loan payment will consist of equal monthly principal and interest payments only until the end of the loan.
• Please remember that we don’t have all your information. Therefore, the rate and payment results you see from this calculator may not reflect your actual situation. Elite Financial Group offers a wide variety of loan options. You may still qualify for a loan even if your situation doesn’t match our assumptions. To get more accurate and personalized results, please call (417) 616-0783 to talk to a loan officer.

Springfield MO

A HomePath Mortgage allows a borrower to purchase a Fannie Mae-owned property with a Low Down Payment, Flexible Mortgage Terms, No Appraisal and No Mortgage insurance.  Since I am one of the few lenders in the area that can offer this program, I have been getting more calls lately asking about HomePath financing.  You can even use the Homepath Renovation loan to finance renovations to a property that you would like to buy and make repairs to.

Since I’ve personally noticed a significant increase in questions about this financing I thought I would cover the basics.  First, there are two types: a HomePath Mortgage and a HomePath Renovation Mortgage.  The difference being, the HomePath Renovation Mortgage will allow minor fixes to the property.

HomePath Mortgage:

• Minimum 3% down for primary residence

• 10% down investment property

• Borrower can own up to 10 financed properties (but need 25% down if they   own more than 4)

• NO APPRAISAL NEEDED

• NO MORTGAGE INSURANCE

• Seller contributions can be 6-9% on primary residence (the larger the down payment, the larger the allowable contribution), only 2% on investment property

Homepath Renovation:

• This will allow for light renovations to the property that can be included into the loan.

• An appraisal is done “subject to” the completion of the repairs. The value will typically be the appraised value or the cost of the house plus renovations, whichever is lower.

• The down payment is based on this value (hence, most of the renovation work gets financed into the loan).

• The loan closes and the repairs are completed by a licensed contractor within a specified amount of time

• There is more involved with these types of loans, such as: bids, inspections, draw schedules, etc.

This loan does price with a higher rate than your average 30 year fixed conforming loan, but keep in mind, there is no mortgage insurance.

Same basic underwriting requirements of a conforming loan, but without the property issues (appliances missing – no problem)

Overall, the HomePath Mortgage is a great loan.  If you are “handy” and can do most of the work yourself, you may consider the HomePath Mortgage.

If you are looking for a Fannie Mae REO property that would be eligible for this program go to www.HomePath.com.

If you have questions about this feel free to give me a call.

 

Comments or questions are welcome.

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When you are ready to sell your home you should call several realtors to come and prepare a Market Analysis for a recommended sales price.  When you interview the agents beware if one of the agents is willing to list your house higher than any other agent.  The truth is that you may have just met an agent engaging in a questionable sales practice called “buying a listing.”  They “bought” the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, they are quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.

Your house gets the most attention when it is a new listing, and if you price it properly, agents will show your house to possible buyers.  If you price it too high, no one will show the house and it will sit on the market for some time. When you finally drop your price to reflect its real value, your house is old news and buyers may think you are growing desperate. Therefore, the prices you are offered will come in low and you may find yourself accepting a price that is below what you could have received had the house been priced properly to begin with.

Why do some agents “buy” a listing this way?

An agent can feel pressure from a homeowner who has an inflated perception of his home’s value. On the other hand, there are some agents who engage in this sales practice routinely.

It is human nature for you to want the highest price for your home. However, when you choose the agent who promises what you want to hear, it often leads to stress and frustration. Most of the time, it will take you longer to sell your home. Possibly, you will end up selling at a much lower price instead.

Get qualified for you new mortgage loan.

 

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If you don’t think you can get approved for a home loan, look at this recent closing.

Customer was Renting a home for $850 per month.

They had a Chapter 7 Bankruptcy discharged in July 2008, including a foreclosure on their home.

We closed their loan with NO MONEY DOWN, and they received over $4000 for new appliances.  The loan amount was $112,000 and now they only pay $702 a month including taxes and homeowners insurance.

How much is your Rent?  Call today to get qualified on a home loan.

Apply Online

 

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 Apply Online

• Mortgage rates can change daily.
• Actual payments will vary based on your individual situation  and current rates.
• Lending services may not be available in all areas.
• Some restrictions may apply.
• Based on the purchase/refinance of a primary residence.
• We assumed (unless otherwise noted) that: closing costs are paid out of pocket; this is your primary residence and is a single family home; debt-to-  income ratio is less than 40%; and credit score is over 720,
• The lock period for your rate is 30 days.
• If LTV > 80%, PMI will be added to your monthly mortgage payment, with the exception of Military/VA loans. Military/VA loans do not require PMI.
• For FHA loans payment includes a onetime upfront mortgage insurance premium (MIP) at 1.0% of the base loan amount and a monthly MIP calculated at 0.90% of the base loan amount. The 0.90% monthly MIP will be paid until the loan reaches 78% LTV, provided the MIP has been paid for a minimum of 5 years. Thereafter, the monthly loan payment will consist of equal monthly principal and interest payments only until the end of the loan.
• Please remember that we don’t have all your information. Therefore, the rate and payment results you see from this calculator may not reflect your actual situation. Elite Financial Group offers a wide variety of loan options. You may still qualify for a loan even if your situation doesn’t match our assumptions. To get more accurate and personalized results, please call (417) 616-0783 to talk to a loan officer.

• Mortgage rates can change daily.
• Actual payments will vary based on your individual situation  and current rates.
• Lending services may not be available in all areas.
• Some restrictions may apply.
• Based on the purchase/refinance of a primary residence.
• We assumed (unless otherwise noted) that: closing costs are paid out of pocket; this is your primary residence and is a single family home; debt-to-  income ratio is less than 40%; and credit score is over 720,
• The lock period for your rate is 30 days.
• If LTV > 80%, PMI will be added to your monthly mortgage payment, with the exception of Military/VA loans. Military/VA loans do not require PMI.
• For FHA loans payment includes a onetime upfront mortgage insurance premium (MIP) at 1.0% of the base loan amount and a monthly MIP calculated at 0.90% of the base loan amount. The 0.90% monthly MIP will be paid until the loan reaches 78% LTV, provided the MIP has been paid for a minimum of 5 years. Thereafter, the monthly loan payment will consist of equal monthly principal and interest payments only until the end of the loan.
• Please remember that we don’t have all your information. Therefore, the rate and payment results you see from this calculator may not reflect your actual situation. Elite Financial Group offers a wide variety of loan options. You may still qualify for a loan even if your situation doesn’t match our assumptions. To get more accurate and personalized results, please call (417) 616-0783 to talk to a loan officer.

A bankruptcy is defined as a federally authorized procedure by which a debtor is relieved of total liability for its debts by making court-approved arrangements for their partial repayment.   Now there are two types of bankruptcies that apply to individuals and underwriting treats them both differently.

First is the Chapter 7 which is the liquidation bankruptcy.  In the Chapter 7, a trustee of the court will collect non-exempt assets and liquidate them to pay a portion of the debts that are owed.  Once completed, or discharged, the individual is free from debt.

The other is the Chapter 13 bankruptcy.  In the Chapter 13 the trustee of the court will create a Repayment Plan where the individual will make payments to the court over a series of years until the debts are paid in full.  Then a discharge is issued.

There are two more things you need to know…

1.      How USDA Underwriter will handle bankruptcies

2.      How lenders who fund the USDA Loan will underwrite bankruptcies.  Just remember, that the USDA does not actually fund the loan.  The funding comes from various lenders.

First, lets see how the USDA Program handles bankruptcies.

The USDA guidelines are known as the 1980.  If we look at 1980.345 section d.1.viii it reads like this.. “Any debts written off within the last 36 months are considered unacceptable credit.”  And a bankruptcy would fall under this category.

Wait, there’s more,

Because in the prior section it reads “unless the cause of the problem was beyond the applicant’s control”…

So, if the cause of the bankruptcy was due to a circumstance beyond the control of the borrower, then it can be possible to get approval for a USDA loan.

If we continue reading, section d.3 tells us exactly how to prove that situation.

We need to prove that the cause of the problem was:  temporary in nature, beyond the applicant’s control, and have been removed.  Examples given in this section include:  loss of job, reduction of government benefits, loss of income, increased expenses due to illness, or death.

So if you had a bankruptcy within the last 36 months and you can prove that it was caused by a circumstance beyond your control, then you have a fighting chance to get a USDA loan approval.

Now, … how the lender’s underwriter will evaluate a prior bankruptcy.

All lenders have overlays, which mean that they have their own internal rules that trump the USDA guidelines.  So it is more important to know your lenders overlays than it is to know the USDA rules.

Most lenders will just flat out require that a bankruptcy be discharged 36 months, period.  Some will consider a chapter 13 after being discharged 1 year.

But there are only a few lenders who will have a much leaner bankruptcy overlay and follow the USDA guidelines very closely.  This type of lender will typically want to see any type of bankruptcy have at least 3 established credit trade lines reporting on the credit report in order to show that you are rebuilding credit.  In most cases this would take at least 12 months to accomplish.

This type of lender is much more difficult to find.  We have partnered with a lender that fits into this category.

Give us a call to get qualified to purchase your new home.  (417) 619-0783  or  Apply Online

According to Freddie Mac, interest rates recently dropped to all-time lows in some categories, and within a hair of all-time lows in others. We will likely never see rates at these levels again. If you missed the chance to refinance earlier this year, you just got a do-over. Don’t miss out a second time!

Why Act Now?
While the reasons to act now are numerous, here are just a few.

No one, not even George Washington, had a chance to borrow money at these rates…but you do!

Inflation, while currently contained, is likely to show its ugly head as all the stimulus from Washington continues to pour into the system. The end result will be increasing inflation pressure across the board, which will cause all interest rates to rise.

It is likely that interest rates at these levels will never be seen again in our lifetime. Take advantage of them today while you still can so you’ll never have to look back and say, “I wish I had….” If you took advantage of this opportunity earlier this year, congratulations! If not, call me so we can discuss your situation.

Likewise, if you know someone else who can benefit, be it a family member, friend, or co-worker, please have them call me or let me know who they are and I will reach out to them. This could be the greatest gift you could offer someone this year.

I look forward to speaking with you soon.

 

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Eligible homeowners who are current on their mortgages but have been unable to take advantage of today’s lower interest rates because their homes have decreased in value, may now have the opportunity to refinance. Through a refinance under HARP, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they own or that they guaranteed in mortgage backed securities.

You may be eligible if:

• You are the owner-occupant of a one- to four-unit home.
• The loan on your property is owned or guaranteed by Fannie Mae or Freddie Mac and you are not currently paying PMI (Principle Mortgage Insurance).
• At the time you apply, you are current on your mortgage payments, means that you have not been more than 30 days late on your mortgage payment in the last 12 months.
• The amount you owe on your first lien mortgage does not exceed 125% of the current market value of your property.
• You have a reasonable ability to pay the new mortgage payments.
• The refinance improves the long-term affordability or stability of your loan.

Fannie Mae and Freddie Mac have established toll-free telephone numbers and web submission processes to make this data available. Homeowners can enter information to determine if either agency owns or guaranteed the loan.

For Fannie Mae:
1-800-7FANNIE (8am to 8pm EST)
www.FannieMae.com/loanlookup

For Freddie Mac:
1-800-FREDDIE (8am to 8pm EST)
www.FreddieMac.com/mymortgage

This information is not a guarantee of eligibility for a refinance under HARP, so give Tim Singleton a call and I can check to see if you would qualify.

Eligible loans will include those where the first lien mortgage does not exceed 125% of the current market value of the property. For example, if your property is worth $200,000 but you owe $250,000 or less on your first lien mortgage you may qualify. The current market value of your property will be determined after you apply to refinance.

You can still qualify for a refinance under HARP if you have a first and second lien. As long as the amount due on the first lien mortgage is less than 125% of the value of the property, homeowners with more than one mortgage may be eligible for a refinance under HARP. Your eligibility will depend, in part, on two additional requirements:

• The lender that has your junior lien mortgage must agree to remain in a junior lien position.
• You must be able to demonstrate your ability to meet the new payment terms on the first lien mortgage.

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