Mortgage Advice

From The Columbus Board of Realtors (Feb. 21, 2013) - Central Ohio home sales during the first month of 2013 were the highest for January since 2007 just before the housing market began to feel the effects of the economic recession. The 1,374 closings exceeds the previous year by 20.4 percent (1,141) according to the Columbus Board of REATORS®.

“Housing activity was up abnormally high during the traditionally slower months at the end of the year,” said Chris Pedon, President of the Columbus Board of REALTORS®. “So we’re not surprised to see such a jumpin closings last month.”

Home prices hit their lowest in several years during the recession but are well on their way back. The average sale price of a home sold in central Ohio in 2012 was $167,459, which is 7.2 percent higher than in 2011.The average sales price ($149,477) jumped 5.1 percent from January of 2011 and the median sales price ($129,000) was up 5.3 percent.

IRRRL stands for Interest Rate Reduction Refinancing Loan.  You may see it referred to as a "Streamline" or a "VA to VA."  Except when refinancing an existing VA guaranteed adjustable rate mortgage (ARM) to a fixed rate, it must result in a lower interest rate.  When refinancing from an existing VA ARM loan to a fixed rate, the interest rate may increase.

No appraisal or credit underwriting package is required by VA.  You should be aware, however, that lenders may require an appraisal and credit report anyway.

A certificate of eligibility is not required.  Your lender may use our e-mail confirmation procedure for interest rate reduction refinance in lieu of a certificate of eligibility.

Click here to get a list of VA FAQs.

An IRRRL may be done with "no money out of pocket" by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.  (Remember: The interest rate on the new loan must be lower than the rate on the old loan unless you refinance an ARM to a fixed rate mortgage).

No lender is required to make you an IRRRL, however, any lender of your choice may process your application for an IRRRL.  While it might be the best place to start shopping for an IRRRL, you do not have to go to the lender you make your payments to now or to the lender from whom you originally obtained your VA Loan.

Some lenders may contact you suggesting that they are the only lender with authority to make IRRRLs.  Remember - Any lender may make you an IRRRL.

Some lenders may say that VA requires certain closing costs to be charged and included in the loan.  Remember - The only cost required by VA is a funding fee of one-half of one percent of the loan amount which may be paid in cash or included in the loan.

You must NOT receive any cash from the loan proceeds.

Check out our VA Home Loan Center for answers to all of your VA questions.

 An IRRRL can be done only if you have already used your eligibility for a VA loan on the property you intend to refinance.  It must be a VA to VA refinance, and it will reuse the entitlement you originally used.  You may have used your entitlement by obtaining a VA loan when you bought your house, or by substituting your eligibility for that of the seller, if you assumed the loan.  If you have your Certificate of Eligibility, take it to the lender to show the prior use of your entitlement.

The occupancy requirement for an IRRRL is different from other VA loans.  When you originally got your VA loan, you certified that you occupied or intended to occupy the home.  For an IRRRL you need only certify that you previously occupied it.

The loan may not exceed the sum of the outstanding balance on the existing VA loan, plus allowable fees and closing costs, including funding fee and up to 2 discount points.  You may also add up to $6,000 of energy efficiency improvements into the loan.

NOTE:  Adding all of these items into your loan may result in a situation in which you owe more than the fair market value of the house, and will reduce the benefit of refinancing since your payment will not be lowered as much as it could be.  Also, you could have difficulty selling the house for enough to pay off your loan balance.

Some lenders offer IRRRLs as an opportunity to reduce the term of your loan from 30 years to 15 years.  While this can save you a lot of money in interest over the life of the loan, if the reduction in the interest rate is not at least one percent (two percent is better) and lots of new loan costs are rolled into the new loan, you may see a very large increase in your monthly payment.

Beware:  It could be a bigger increase than you can afford

No loan other than the existing VA loan may be paid from the proceeds of an IRRRL.  If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage.

In this current real estate environment , don't be afraid of a home that is in rough condition. You can pick out new carpet, get new appliances, put in beautiful kitchen cabinets, upgrade the bathrooms and still only put 3.5% down! Buy it at a low price and fix it up the way you want it.  With our government backed Home Improvement Mortgage you can finance up to $35000  in repairs into your mortgage to improve or upgrade your existing home or make repairs on a rough home you want to buy. That's right, if you find a bank owned house  that needs updated, you can finance those repairs into your mortgage and still have a downpayment of only 3.5%.

Refinancing Your Columbus FHA Loan 
Just Got a Lot Easier & Cheaper!

Changes to the FHA streamline program for Columbus homeowners have made it far more attractive and simple to reduce interest rates and lower payments, even if you owe more than your home is worth…

What is the FHA Streamline Program?

FHA Streamline refinances enable Columbus homeowners to refinance their current FHA home loans with reduced paperwork and underwriting to take advantage of lower interest rates so that borrowers can save more money, lower their monthly housing payments and in some cases change from an adjustable rate mortgage to a fixed rate mortgage loan or even shorten the term of their loans.

This means less hassle, less paper, faster processing and potentially huge savings over the life of your loan.

There are many advantages for Columbus property owners, including the availability of ‘no-cost’ refinances and even those who didn’t qualify before might qualify now.

What Are the New Changes That Make FHA Streamline Loans Even Better?

These home loans have been available for years. Unfortunately, recent increases to mortgage insurance (MI) premiums often wiped out the savings for those refinancing.

At least until now…

New changes to the FHA Streamline program apply to those whose FHA-insured home loans were endorsed on or before May 31^st, 2009.

In an effort to assist more Columbus homeowners with FHA mortgages to refinance at today’s incredibly interest rates FHA mortgage insurance rates were reduced, effective June 11^th, 2012.

This new change alone means thousands of dollars in savings for most borrowers.

According to the FHA, based upon a $200,000 30 year mortgage with a loan-to-value higher than 95%, those who took out loans on or before May 31^st, 2009, will now realize the following savings:

*Guidelines may change so please check with us to determine the exact savings for your specific situation. 

Additional guidelines for FHA streamline refinances state that:

• NO employment verification is required*
• NO income verification is required*
• NO credit score verification is required*

*IMPORTANT: These are FHA guidelines. Lenders may have their own guidelines called overlays, which may require all or some of these guidelines to be met.

Features & Benefits of Columbus FHA Streamline Mortgages

Why choose an FHA Streamline refinance?

In addition to incredibly low interest rates and massive savings over the life of your mortgage loan, streamlined refinances offer the following benefits:

• Low MI
• No appraisals required
• ‘No-cost’ refinancing possible
• Lower credit scores OK
• No loan balance increase to cover loan costs
• Can refinance even if ‘underwater’

Do You Qualify for an FHA Streamline Refinance?

Are you ready to start saving and lower your monthly housing payments so that you can get ahead and have more free cash in your hand each and every month from here on out?

Columbus FHA streamline refinances couldn’t be easier and less stress-free to qualify for, but in order to be eligible for the newest program updates you will need to have:

• FHA-insured loan was endorsed on or before May 31^st,2009
• Must currently have a FHA loan
• Not refinanced within the last 6 months
• Not been more than 30 days late on your mortgage payments in the last 12 months

Note that while FHA itself requires no minimum credit scores or income or employment verification, most lenders do have their own additional criteria for these items.

More About FHA Streamline Eligibility Guidelines...

Find out how much you can save...

Call me to discuss your specific needs and we'll find the program that's right for you.
We have a variety of low down payment and no down payment programs available

Lower your interest rate.

Securing a lower interest rate is one of the top reasons for  refinancing. This can make a big difference in your monthly out-of-pocket costs for housing and save money on financing fees.

Build equity faster.

If you are in a position to make higher monthly payments due to an increase in salary or other good fortune, you may want to switch from a 30-year loan program into a 15-or 20-year loan structure. This enables you to build equity faster and save a tremendous amount of money on financing fees.

Change your loan program.

Some homeowners who start out in an Adjustable Rate Mortgage (ARM) find that they would like to switch to the stability of a Fixed ate mortgage at some point. An ARM may have been the most attractive rate and loan package when you first financed your home, but we can provide you with loan comparison charts to find out if you can save money with another type of loan program that might work better for you right now.

Credit score has improved.

If your credit score has improved as a result of making your mortgage payments on time and in full, you may be in a position to take advantage of your improved credit standing. We can review your current credit score, the terms of your existing mortgage, and review options for other loan programs that could not only reduce your monthly payment, but also save you money on interest fees paid over the life of the loan.

Use the equity you have established.

A cash-out refinance allows you to tap into the equity you have built up in your home. You may want to pay off revolving credit card accounts, send a child to college, or use the money for home improvements or personal expenses.

Regardless of your reasons for wanting to refinance your existing mortgage, my team and I are interested in helping you make a decision that works best for you.  We continually monitor rates and alert our clients of interest rate changes in order to inform them of the best time to refinance.

We will also review the terms of your existing mortgage program. It is important to consider whether or not you have a pre-payment penalty written into your existing loan, and what the purpose of the refinance is. It is also important for us to know how long you plan to stay in the home. This helps us to determine whether or not it is beneficial for you to pay points up front to secure a lower interest rate on your new financing. The lender will want to know what the current property value is, how much equity you have built up, and what your current credit score is.

Call me directly for a free consultation. 614-610-4245