And so if to take twenty three million of all living veterans these days, even less than ten percent actually have utilized that benefit and advantage that is given to them. Thus if you are truly the veteran or a member of the active military and even the current or surviving spouse of the veteran, then you may definitely be in the necessity of much more information concerning those two most popular and widespread government backed loans that are available for you these days. In fact, those loans are the FHA loan and the VA loan. So refinancing or purchasing a new home is certainly a huge decision, that’s why it is obviously best to be totally informed.

Well, let’s discus this topic – FHA loans versus VA loans. First of all, those VA loans are nearly identical to the majority of conventional loans, they just offer numerous additional benefits and advantages, for example like – lower qualifying credit scores, no down payment requirements and also lower loan fees that can actually be packaged into the mortgage.

There is one more essential point – FHA loans are quite popular and widespread option among a big number of non-veterans. For sure, much more lenient qualifying credit criteria, easy and simple refinancing and also low down payment demands surely attract a big number of individuals that may obviously not otherwise really qualify for some conventional mortgage.

Besides, VA loans certainly have the eligibility requirements which have to be net before an active military member or a veteran actually is able to be approved for that loan. In fact, the certificate of this eligibility is going to be issued to some qualified individuals and is going to involve the entitlement amount – that particular portion of the mortgage which the VA is obviously going to ensure for every service individual. Moreover, your mortgage lender is able to get this certificate for you or the VA can also issue these eligibility certificates.

And finally, nearly everyone is actually able to have the FHA loan. In fact, there isn’t some income limits. But still there are some limits on how much exactly you are able to borrow. However, those loans for veterans definitely do not require you to really pay some particular private mortgage insurance – so called PMI.

Lots of people nowadays are experiencing the problem of paying off a mortgage. Bad loan is a vital question which might solved by refinancing. These days lending market offers various options for home refinancing for house buyers. Those who are looking for a smart option like VA refinance, please go to this VA refinance site where you will also find info about VA refinancing and how to low down payments.

Also I would like to share some general tips. Today the web technologies provide us with a truly unique chance to select what one wants at the best price on the market. Search Google or other search engines, visit forums and social networks, and have a look on the accounts that are relevant to your topic. Also subscribe to the RSS feed on this and other blogs – all this will help you be aware of the events and news about this and relevant important issues.

FHA Short Refinance

FHA Short Refinance – A Simple Definition:
Recently, FHA (officially) announced that they are allowing FHA lenders to help borrowers who have negative equity in their home get a new FHA loan when the existing lender agrees to a short payoff. This is known as an FHA short refinance. Just a few requirements for people to be eligible for the FHA short refinance program include:

• There must be negative equity
• You must be current on your mortgage payments on the mortgage being refinanced
• You must live in the home as your primary residence
• Your current mortgage being refinanced may not be an FHA loan
• Your current lender must write off at least 10% of the principal balance
• The new maximum LTV is 97.75% for the new loan.

FHA Short Refinance – An Expanded Definition:
The FHA short refinance is not something that is new – in fact, many loan officers have figured them out, tried them and simply gave up trying to help people get them done because it was so difficult to get a lender to agree to accept a short payoff.

In my opinion, the key to having a successful FHA short refinance is going to be to get your existing lender to agree to accept a short payoff. If you get your lender to agree to a short payoff, one other thing to remember is that when you participate in the FHA short refinance program, it could possibly show as a derogatory item on your credit score as well as have tax implications. You will want to contact your tax advisor and be informed of possible credit score impacts that the FHA short refinance program could trigger.

With all of the “ifs” that the FHA short refinance program has circling it (still), I think it is something that many people across the country could benefit from. IF you can get your current lender to agree to a short payoff and IF you are aware and ready for any tax consequences and IF you qualify for the program… well, then the FHA short refinance program is a great solution.

But don’t expect it to be a short process.

Additional Resources
FHA Short Refinance HUD Announcement
FHA Short Refinance Mortgagee Letter
Previously: FHA Short Refinance: Does This Make It Real?

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Today most loans are going FHA….The same folks that wouldn’t go near FHA financing think it’s the greatest thing since sliced bread!  The loan and it’s standards really hasn’t changed, the alternative options have disappeared.  However more than a few properties will need to have minor repairs and maintenance done to the property prior to closing…or does it?

Properties that need repairs prior to closing are still being bought and sold and not all of them have to be repaird prior to closing.  A good number of my referals come from a short sale negotiators, and it has dawned on me that unlike a traditional sale, it is much more difficult to get repairs done on a property that is under agreement as a short sale.

Solution – Structure the transactions as 203K loans…If the appraisal comes in needing repairs get the contractor and or Hud Consultantout right away.  Add the cost of repairs to the purchase..No need to delay a closing…and no need for the buyers to start looking again.   If no repairs are needed and the borrower doesn’t want to make any improvements…. no problem, close as a regular FHA loan. The difference in pricing between a regular and an FHA loan today 4.5%-4.625% for a regular FHA and 4.75%-4.875% for a 203K loan.  How much time and money do new home owners spend on do it yourself projects…You should sit down and do the math on what it would cost you in time and money to strip wall paper and paint rooms vs. paying a professional, before you sentence yourself to the next 3 months of hard labor on your time off! 

203K loans have the perception of being too dificult, take too long and are too expensive to obtain.  Those perceptions are simply not reality!

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• The upfront mortgage insurance premium (MIP) will be raised from 1.75 percent to 2.25 percent
• The minimum down payment will climb from 3.5% to 10% if your Fico score is below 580
• Allowable seller concessions will be reduced from 6% to 3%

The FHA also plans to request legislative authority to increase the maximum annual mortgage insurance premium so it can reduce upfront costs for prospective home buyers.

The proposed changes, which apply to all FHA loans, are expected to go into effect in either spring or summer, so you may want to get that FHA loan application in sooner rather than later.

Additionally, the agency will continue to increase enforcement on FHA-approved lenders, and will publicly report lender performance rankings to improve transparency and accountability.

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One of the hurdles for folks that are buying and renovating distressed properties are the end buyers have not been eligible for FHA Financing.  The lifting of this rule will increase the buying pool for these properties…

If you want to take a look at some reaction to the change check out this thread on Zillow!

More to follow but I thought this was worth a quick shout!

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People considering purchasing a home with an FHA loan in the coming months would do well to check out today’s USA Today. The newspaper takes a look at the controversy surrounding new home appraisal regulations that are getting ready to take effect in mid-February.

Beginning Feb. 15, mortgage brokers, Realtors and anyone else who might earn money on your transaction must have a third-party appraisal management company (AMC) conduct an appraisal of the home in question. The days of brokers ordering their own appraisals are dwindling.

Legislators have argued the new process will curb appraisal inflation and fraud. But organizations that represent Realtors, brokers and other stakeholders claim the change will lead to delays, shaky appraisals conducted by people unfamiliar with the market and, ultimately, considerably lower home valuations.

AMCs and others in their industry defend their practices, claiming that low home values are a direct result of the market.

For many prospective homeowners, this will likely play out somewhere in the middle. Appraisal times will probably rise. Home values probably won’t. The reality is, it’s just more difficult to navigate the process in some parts of the country. Establishing a value is taking longer in places where the market continues to lag.

Borrowers should check with their loan officer early and often. Ask for constant updates. Poke and prod when necessary. But don’t abandon all hope.

FHA loans remain one of the most flexible and productive loans on the market, especially for first-time buyers and those with lower and middle incomes. Borrowers might want to keep that idea of flexibility at the forefront of their minds in the coming months, as the industry continues to adjust to these new requirements.

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WE knew it was coming for sometime and it finally arrived. As expected, the FHA has lowered the cash out refinance Loan to value from 95% down to 85% as of April 1st.

This change is not permanent as of yet. The Department of Housing and Urban Development wants some time to take a look at all the loans it currently has in its portfolio. But we do not anticipate that it will go back up any time soon.

As we understand it, if you currently have a second mortgage which combined makes your loan to value ratio greater than 85% that would be allowed of your keep 2nd mortgage in tact.

In order to receive cash out from your property there must be 12 months seasoning, meaning that you must have owned the house for at least a year.

No longer will the FHA allow non occupied co-borrowers to help the borrower qualify for the mortgage.

If your loan amount is greater than $417,000 or if you live in an area where home values are declining, you must have two appraisals done.

Any borrower who is delinquent will not qualify for a cash out mortgage.

Although these changes are hard to swallow for some it may be the best course of action right now to preserve the FHA as strong alternative to a tight lending market.

FHA loans are one of the best resources for home loan financing right now and they are needed to revive our slumping housing market and our slumping economy.