Wow! Mortgage Applications Climb Out Of 7 Month Low
The Mortgage Bankers Association is reporting that mortgage applications have climed out of a 7 month low last week. Is this a sign that the housing collapse is starting to stabilize? Perhaps. Maybe it is that folks are realizing that the fantastic mortgage rates we have right now will not last forever. In any event, the fact the more and more people are applying for mortgages is a good thing. Let’s hope the trend continues next week. By the way, if you haven’t heard, mortgage interest rates are great today. If you are thinking about buying or refinancing your home, now is a great time to act.
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How To Talk To A Mortgage Broker
How To Talk To Mortgage Brokers And Loan Officers About FHA Loans
Before you even begin to talk to a mortgage broker or mortgage lender about an FHA loan you should have all your ducks in a row. Now more than ever, it is more difficult to get approved for a home loan or a mortgage refinance. Therefore, if you follow these steps, you will have an easier time with the mortgage process.
Things To Ask Your Mortgage Broker Or Loan Officer.
- Discuss all the types of FHA or government loans that are available with your loan officer including types of loans, and types of documentation required. If you need a bad credit refinance, this is very important.
- Tell your loan officer that you will only take a fixed rate FHA mortgage out. Right now, mortgage interest rates are at or near historic lows. Obtaining anything other than a fixed rate mortgage now would be contrary to rational thinking.
- Ask your loan officer exactly what documentation will be needed for your FHA loan before you begin the application process. Having all your needed documents up front will avoid delays and speed up the process.
- Ask your loan officer what exactly his or her fees are. Then ask if they are negotiable. Hint, they are almost always negotiable.
- If your loan officer tries to sell you on a loan that seems to good to be true it most defiantly is so run the other way. FHA loans should be straight toward.
- Ask how long the process will take. A loan should not have to take more than 30 or 45 days.
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Tips
- Don’t let your loan officer try to lend you more than you think you can comfortably pay back every month. You want to feel very confident that you can repay your loan easily without stress.
- Get Several offers from different lenders. This will insure that your are getting the best deal.
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FHA Loan To Value Restrictions For Cash Out Refinancing
Maximum Loan To Value Drops For FHA Loans
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.
