Have you been thinking of refinancing your mortgage but are
still waiting to see if rates will drop even further?
Rates are still very low
but the consensus is the Fed will raise rates sooner rather than later.
It
might be time to refinance your note and it also might be time to pull out a
little cash in the process. Pulling out equity in the form of cash is what the
industry calls a “cash out” refinance and allows you to put some money in your
pocket while refinancing your existing mortgage. Borrowers typically refinance
for three different reasons—lower the rate, adjust the loan term or change from
a fixed to a hybrid or a hybrid to a fixed. During that process, you can also
pull out cash to do with whatever you wish.
Want to pay off your credit card debt or your automobile
loan? Compare your monthly payments on your credit balances and installment
loans with your new mortgage payment. Let’s say you’re refinancing a $300,000
mortgage but you also want to pay off your automobile loan. The car loan is $25,000
and your monthly payment is $575. If you borrowed $325,000 and paid off your
car, your mortgage payment goes up about $100 each month with a 4.00% 30 year
rate but you eliminated the $575 car loan payment.
What about a kitchen remodel? Want to add a deck and begin
enjoying your backyard again? Swimming pool perhaps? With a cash out refinance,
you can not only take advantage of today’s rates but also take care of any home
improvements you’ve been thinking about. Still others use their home equity to
take care of some college bills or even open up a college fund.
The point is this—you can use your cash out funds for
anything you want, and the interest rates on a cash out loan are much lower
than putting something on a credit card or an installment loan. If you’ve been
thinking of refinancing, don’t forget you can also tap into some of that equity
as well. Talk it over with your loan officer and see how a cash out refinance
might be in your future.
Call Toll Free at 844)505-3655 or Please visit our website at
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The VA loan program offers veterans, active military and other specific groups the opportunity to purchase a home with 100% financing. However, the program does not end there, but continues to provide benefits to homeowners, one of which is the VA Streamline Refinance program or IRRRL.
IRRRL stands for the Interest Rate Reduction Refinance Loan and is the VA program’s most commonly used refinance product. It is also known as a VA to VA loan because it is only available for those who already have an existing VA loan and is used to refinance the current mortgage to a lower rate, shorter term or adjustable to fixed rate. Just like the original VA loan, the IRRRL is designed to make it easier for VA mortgage holders to save money.
Requirements For Obtaining the VA IRRRL
- The current loan must be a VA loan.
- The mortgage must not have more than one 30 day late payment within the past year.
- The borrower cannot receive any cash out from the refinance.
- The borrower must certify that they previously occupied the residence at some point in time.
- The monthly mortgage payment for the IRRRL must be lower than the payment for the original VA loan. This requirement is not mandatory when refinancing from an adjustable rate mortgage to a fixed rate loan, or when reducing the term of the mortgage.
- There is much less documentation and very little paperwork required with the VA IRRRL.
- The closing costs for the IRRRL can be added to the loan amount which means that the borrower can refinance with no out of pocket expenses. In some cases, the borrower may choose for lender paid closing costs which usually is done through a slightly higher mortgage rate.
- A new Certificate of Eligibility is not required since it is already on file for the original VA loan.
- There is minimal credit underwriting with an IRRL. Income verification is generally not needed.
- VA does not require an appraisal with the IRRRL.
The VA IRRRL (streamline refinance) is another great VA mortgage product that continues to help the military community. It does not take long to apply, process and close this type of loan which can inevitably leads to a substantial savings for the homeowner.
Feel free at any time to contact one of our licensed loan officer at Majestic Home Loan for more information about the VA Streamline Refinance – IRRRL and you can benefit from refinancing.
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The FHA mortgage program is easily the most popular for the
first time home buyer set. Why? Because the loan only requires a down payment of
3.50 percent making it easier to save up enough cash to close. FHA loans also
carry a government guarantee which lenders appreciate as well. As long as the
loan was approved using standard FHA guidelines, should the loan ever go into
default, the lender is compensated for the loss. This guarantee is financed by
mortgage insurance premiums paid by the borrower. And one other special feature
of FHA loans applies to refinancing, called the FHA Streamline refinance and
with recent changes to the mortgage insurance premiums, the program is even
more attractive.
It’s relatively easy to determine whether or not a refinance
is a good move. By speaking with a loan officer, compare the amount of interest
saved along with monthly payments with the amount of closing costs required on
the loan. However, even if a refinance does make sense, without sufficient
equity in the home, a refinance isn’t possible. That is, unless you have an FHA
loan.
The FHA streamline refinance loan requires very little
documentation. How little? How about:
- No employment verification
- No income verification
- No credit scores required
- No appraisal needed
 You read that right. Even if you’re upside down on your
property and owe more than what the property is worth, you may still be
eligible for an FHA streamline as long as your lender can document a tangible
benefit such as lowering a monthly payment by at least 5.00 percent or
switching from an adjustable rate loan to a fixed. There are other requirements
so it’s important to first speak with your lender. For example, closing costs
cannot be rolled into the loan with a streamline.
And while lowering your monthly payment, FHA has also
reduced the mortgage insurance premiums as well. For loans endorsed before June
1, 2009, the upfront mortgage insurance premium (the one you roll into your
loan) is a scant 0.01 percent and the annual premium paid monthly is 0.55 percent
of the loan amount. For FHA loans endorsed after June 1, 2009, the upfront
premium is 1.75 percent of the loan amount and the annual premium paid monthly
ranges from 0.45 percent to 0.85 percent, depending upon the loan term and
loan-to-value.
There are more details you need to know about to see if this
program is a good fit but if you meet the criteria and your lender can document
a true benefit from refinancing your existing FHA loan, this will quite
possibly be the easiest mortgage process you’ve ever experienced.
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The military is the king of acronyms. The IRRRL moniker
stands for the Interest Rate Reduction Refinance Loan, sometimes referred to as
a VA streamline. When a borrower wants to refinance an existing VA loan, by far
the streamline is the best option. Why? Because as the name implies, the
process is “streamlined” with very little paperwork required other than a
completed loan application. As long as
the veteran is refinancing an existing VA mortgage into a new one, the loan may
qualify, and you don’t have to use the same lender you used last time.
The VA streamline mortgage requires no appraisal, no credit
check and no income or employment documentation as long as the refinance “makes
sense” by lowering your monthly payment, refinancing out of an ARM and into a
fixed or changing your loan term. There are a few basic requirements but
they’re relatively easy to meet:
You must be current on your mortgage and no more than one
payment more than 30 days past the due date within the previous year you must
have previously occupied the property and used your VA home loan benefit to buy
and finance the home.
This means if you kept the property as a rental or vacation
home, you can still refinance the existing VA loan using the VA streamline. VA
loans are used only to purchase a primary residence and not for investment
properties. However, as long as you initially occupied the home then later
moved to another, you’re still eligible. You can also roll closing costs into
your loan amount as well which means you don’t need to come to the closing
table with any out of pocket expenses but you can’t take out any cash during
the transaction.
If you’re thinking about refinancing your existing VA loan,
speak with an experienced loan officer to review your various options. For
those who want to buy a home with as little cash to close as possible, the VA
home loan is by far the best choice for those eligible. And the bonus? The VA
streamline makes it even better.
or Call us at 1-844-462-8971
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Mortgage rates have remained below 4.00 percent for quite
some time. In fact, according to Freddie Mac’s weekly mortgage rate survey, the
last time the 30 year conforming rate was above 4.00 percent was November of last
year. At the same time, property values have risen as well, providing
additional equity to homeowners. This combination of low rates and higher
property values can mean it might very well be an ideal time to lock in these
low rates while at the same time pulling a little cash out during the process.
Have you thought about a cash out refinance?
There are still millions of homeowners who could have
benefited from lower rates but for whatever reason they couldn’t. Perhaps
there wasn’t enough equity in the property or some other issue. If you’re one
of those who have considered refinancing but weren’t quite sure if the time was
right, it’s time to reconsider. Not only can you lower your monthly payment or
shorten your loan term but taking cash out while refinancing can provide you
with additional funds at a very low rate. If you can get a 15 year fixed rate
below 3.50 percent and pull out some equity in the form of cash, where else can
you borrow money at such a low rate?
A cash out refinance is a fairly simple process. You simply
complete a mortgage loan application and submit it to your lender. Your loan
amount will be enough to pay off your current balance, any associated closing
costs plus the amount of cash you’d like to put in your pocket. When you go to
your closing, there’s no need to bring a cashier’s check to escrow. Instead,
the escrow agent will hand you a check for the amount you requested. You can
borrow up to 75 percent of the current appraised value of your home and choose
the ideal loan term of 10, 15, 20, 25 or 30 years.
If you think you’d like to explore this option further, it’s
important to speak with your loan officer to first run the numbers. You’ll need
to consider closing costs but there are ways to offset some or all of your
costs with a simply rate adjustment, putting more cash in your pocket. A cash
out refinance isn’t always the best option, but given sufficient equity and the
math works out, you can use that cash for any purpose whatsoever while at the
same time lowering your monthly payment.
Please visit our website
http://www.mhlmtg.com/oncamp/cashoutrefi_21422053100293361806
or Call us at 1-866-971-5021
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One of the most popular types of VA loans is called the “VA to VA refinance” or “VA streamline refinance.” For many current homeowners, this type of refinance solution offers tremendous benefits over other options.
Listed below are seven quick things that every informed consumer should know when refinancing their home. So, keep reading if you want to learn more about making the most of your mortgage.
Want to get started with the IRRRL process right now? Call us at 855-971-0999 to speak personally with a Majestic Home Loan licensed loan officer, or click here to contact us online! We’re happy to answer any questions you may have.
7 VA to VA Refinance Tips
Here are 7 tips designed to guide you through the VA to VA Refinance, or VA IRRRL process:
What do they call it?
VA to VA refinance goes by a lot of names. Some of the most common alternatives are “VA Streamline Refinance” and “VA IRRRL”, which stands for “U.S. Department of Veterans Affairs Interest Rate Reduction Refinance Loan”. Don’t let the terminology confuse you.
What is VA to VA Refinance?
It is a VA-guaranteed loan made to refinance an existing VA home loan. You need to already have a VA home loan to qualify for this type loan. You can’t use a VA to VA refinance to purchase a new home. These loans come generally at a lower interest rate than the existing VA loan, and with lower principal and interest payments than the existing VA loan.
Does it require a credit check?
Generally, no appraisal, credit information or underwriting is required. Full-document underwriting is not required. We do not require pay-stubs, W-2 forms, or any other proof of income.
The only requirements for a VA Streamline Refinance are a clean mortgage payment history for the last 12 months, a credit-score above 600, no outstanding collections accounts, and no bankruptcy filings in the last two years.
The new loan will re-use the entitlement you originally used. A Certificate of Eligibility is not required. Majestic Home Loan can verify your previous loan information by using the VA’s automated system.
Do I have to pay any costs or fees up front?
A Streamline Refinance may be done with “no money out of pocket”. Instead, all costs may be included in the new loan. The only cost required by VA is a funding fee of 1/2 percent of the new loan amount, which may be paid at closing or added to the new loan.
Veterans entitled to VA disability compensation may be exempt from the funding fee. In addition, the only other expenses are title work which is required by all states and the establishment of an escrow account to pay your homeowner’s insurance and taxes.
How can rates be structured?
They can be a fixed rate or a hybrid Adjustable Rate Mortgage (ARM). There is a good amount of flexibility in the structure of a VA Streamline Refinance loan.
What are the loan refinancing requirements?
A VA to VA Refinance must bear a lower interest rate than the loan it is refinancing. An exception to this would be if the loan it is refinancing is an ARM.
Are there things it cannot be used for?
A VA IRRRL cannot be used to take equity out of the property or pay off debts. The only debt that can be paid with a VA IRRRL is that associated with the VA loan being refinanced. Loan proceeds may only be applied to paying off the existing VA loan and to the costs of obtaining or closing the IRRRL.
Therefore, the general rule is that a borrower cannot receive cash proceeds from the loan. If necessary, the refinancing loan amount must be rounded down to avoid payments of cash to the veteran.
Bonus: Are there any exceptions to #7?
There is one exception to #7. The one instance where you may be able to use a Streamline Refinance to get cash out is in the event that the cash is used for the cost of energy efficiency improvements up to $6,000.
How Can I Get Started?
Getting started with your VA to VA refinance is easy! Just follow these three simple steps:
- Contact Us – Pick up the phone and call us at 855-971-0999
- Speak With A Representative – One of our friendly VA mortgage experts will work with you to learn about your specific situation and needs.
- Apply for a Loan– After determining the best refinancing option for you, we can walk you through the process of completing your loan application.
If you still have questions, we have the answers you seek! Whether you have questions about closing costs, limits, appraisals or refinancing a jumbo VA loan, our representatives are standing by to help.
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Cash-out Refinancing: Everything you need to know
What it is and when to use it?
If you have a significant amount of equity built up in your home and would like to convert that equity into actual money you can use, a cash out refinance From Majestic Home Loan may make sense for you. Here are some of the key things you should know.
What is a cash out refinance?
A cash out refinance is when you take out a new home loan for more money than what you owe on your current loan and receive the difference in cash. For example, if your home is worth $300,000 and you owe $200,000, you have $100,000 in equity. With cash out refinancing, you could receive a portion of this equity in cash. If you wanted to take out $40,000 in cash, this amount would be added to the principal of your new home loan. In this example, the principal on your new mortgage after the cash out refinance would be $240,000.
When is a cash out refinance a good option?
A cash out refinance makes sense in a number of situations:
- When you have the opportunity to use the equity in your home to consolidate other debt and reduce your total interest payments each month
- When you are unable to get other financing for a large purchase or investment
- When the cost of other financing is more expensive than the rate you can get on a cash-out refinancing
What can I use the cash for?
You are free to use the cash in just about any way you want. Many people use it to pay down high-interest credit card debt. Even though you’ll still owe the same amount of total debt when all is said and done, you can save a lot in monthly interest payments. You may also get the benefit of deducting these interest payments from your taxes, whereas your credit card debt is not tax deductible.
Alternatively, some people use the cash for a major purchase or expense if financing is not available or is more expensive than the rate on a mortgage. In this situation, Majestic Home Loan may give you your cash directly to use at your discretion.
Other common reasons for cash out refinancing include:
- Home improvement projects
- Education expenses
- Purchasing an investment property
- Paying for emergency expenses
- Vacations
- Elderly care
Be cautious about using cash-out refinancing or other long-term financing to pay for current or short term expenses. For example, if you use a cash out refinance to pay for a car that you’ll keep for six years, the interest rate will often be much lower than the rate on a new car loan, but you could be paying back the loan for another 24 years. If you use a cash out refinance to pay back credit card debt, you’ll have more credit available on the card, but remember that you still owe the same total amount, or a little more if you finance your closing costs.
Contact one of our experienced loan officers here at Majestic Home Loan at 1-855-971-0999 to see how much equity you can take out of your home and estimate how much you’ll reduce your payments by consolidating your existing debt.. Who knows, maybe it could end up savings thousands of dollars.
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One of the most common questions asked by FHA borrowers is how and/or when can they remove their monthly mortgage insurance. Mortgage Insurance serves a very good purpose. It allows potential home buyers with only 3.5% down payment to buy a home.
To truly avoid mortgage insurance a down payment of 20% would have been needed, which can take a long time to save. But for those who did use FHA financing to purchase their home what happens when property values increase to the point that their loan is less than 80% of the new appraised value? Can’t they ask their lender to drop the mortgage insurance? No. Not exactly. But there are solutions that may make sense and are worth looking into, and Majestic Home Loan can help.
Short History on FHA Mortgage Insurance Rates
Not too long ago FHA mortgage insurance wasn’t too expensive. Prior to October 4, 2010 the standard rate used was .55% of the loan amount. This meant that on a $300,000 FHA loan the monthly mortgage insurance was only $137. ( .0055*$350,000/12 = $137). That is really a great price for the opportunity to put only 3.5% down on a home. In October 2010 the rate was increased to .9%. Loans with FHA “case numbers” pulled prior to October 4 2010 were grandfathered into the old .55% rate, but case numbers pulled after got the .9%. That same $300,000 loan amount would have a $225 mortgage insurance payment each month. Only 6 months later, in April 2011 the rate increased again to 1.15%, or $287 a month on a $300,000 loan amount. In June 2012 the rate increased again to 1.25%, or $312 per month on a $300,000 loan. And in April 2013 the rate increased again to 1.35%, or $337 per month on a $300,000 loan. In less than three years the monthly mortgage insurance on a $300,000 loan increased from $137 to $337. And when you consider that in high cost areas like Orange County, CA, where the FHA loan limits were as high as $729,750 in 2013 (and the mortgage insurance rates were even higher for loans over $625,500 at 1.55%), the monthly mortgage insurance was as high as $942 per month. The 2014 FHA loan limits are now $625,500 in Orange County, CA.
Rules for Removing FHA Mortgage Insurance
First, it depends on when your loan was originated and endorsed by FHA. If your loan was prior to June 3, 2013, then the following is required for a 30 year amortized loan.
- The mortgage insurance is automatically removed once the loan reaches 78% loan to value and has been paid for a minimum of 5 years. The 5 year requirement is often over looked by borrowers who think that a quick appreciation increase should be enough to have it removed. But the real kicker is the the value is based on the original purchase price, NOT the current appraised value. Unless the borrower is making extra payments to principal, it will take approximately 11 years to reach 78% loan to value if the loan started out with 3.5% down payment.
If your loan was endorsed after June 3, 2013 and you put less than 10% down when you bought the home then you are out of luck. The mortgage insurance will remain on the loan until it is paid off.
So What is the Quickest Way to Remove Mortgage Insurance?
Refinancing out of the FHA loan is the quickest way to remove the mortgage insurance. Some areas of California have experienced such quick appreciation in values that even people who bought homes 12 months ago may have enough equity to refinance into a Conventional loan. Even with only 10% equity it may be possible to refinance into a “combo” loan scenario with a first mortgage and equity line 2nd mortgage. The downside to all this is that interest rates are higher in 2014 than they were in most of 2012 through 2013. But for many, the savings from eliminating mortgage insurance more than offsets the cost of a higher rate.
As with all types of mortgage financing, the pros and cons should be carefully evaluated. Refinancing out of FHA is not for everyone. It depends on the rate difference between the FHA loan and the new Conventional loan. It also depends on the borrower's credit. FHA is far more flexible with prior credit issues than Conventional financing, so someone who had a previous short sale or foreclosure may be hindered. But it is definitely worth have a lender like Majestic Home Loan present a thorough analysis of your options. A “Side by Side” analysis comparing the FHA loan to a Conventional loan should be prepared based on the borrowers long term goals with the home. Contact one of our experienced loan officers here at Majestic Home Loan, at 1-855-971-0999 and see how much you can save today. Who knows, maybe it could end up savings thousands of dollars.
For more information, or for an online inquiry please visit our web site at http://www.mhlmtg.com/pr |
If you and your partner plan to split the mortgage payment, and if both names will appear on the mortgage deed, it only makes sense for both of your names to appear on the mortgage loan.
Although it’s customary for couples — either married or living together — to apply for a mortgage loan together, they may run into a few obstacles along the road to homeownership. For that matter, here are three things to know when applying for a home loan as a couple.
1. Understand the way the mortgage industry handles different credit scores
If you’re applying for a mortgage loan with Majestic Home Loan as a couple, we will check both of your credit reports and credit scores. The process includes reviews of your debt, the length of your credit history and current credit activity.
Paying bills late and too much debt can negatively impact a mortgage approval, plus influence the mortgage rate. However, some couples believe that they’ll receive a low interest rate as long as one person has excellent credit — but this isn’t always the case. You’re not likely to receive the most favorable rate due to your partner’s less-than-perfect credit history.
To ensure the best rate, both of you need to maintain good credit before applying for a loan. This includes paying bills on time, paying off debt and checking your credit reports for errors.
2. Lenders might not use both incomes when determining affordability
Some couples apply for a mortgage loan together to qualify for a larger amount. Since lenders use their combined incomes to determine affordability, putting both names on the mortgage loan might be the difference between a $100,000 house and a $200,000 house. However, there are times when a mortgage lender will not accept both incomes.
On average, mortgage lenders require 24 months of consecutive employment and income. Therefore, if your partner didn’t work for the past two years, and recently found a job within months of applying for the mortgage, the lender may not use his or her income. In addition, if your partner is self-employed and doesn’t have tax returns for the past two years, the lender may not use his or her income.
In each case, lender will base the approval amount on one person’s income, which reduces purchasing power.
3. You can’t easily remove a name from the mortgage loan
Unfortunately, some couples eventually go their separate ways. If you apply for a mortgage loan as a couple, and one person decides to keep the house after a break up or divorce, refinancing is the only way to remove a name from the mortgage.
The remaining spouse will have to refinance the mortgage in his or her name only. However, since the original mortgage approval was based on both incomes, the remaining spouse may not be able to qualify for the mortgage loan on his own, at which time, you’ll have to sell the home and use proceeds to pay off the remaining mortgage debt.
Bottom line
Applying for a mortgage loan as a couple can increase purchasing power. However, to receive the lowest mortgage rate and enjoy a hassle-free approval process, both parties need to keep a close eye on their credit and maintain accurate income records.
Majestic Home Loan has exceptionally low mortgage rates. Contact one of our experienced loan officers at 1-877-546-2541 to find out how much you can save. Get started today.
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Tips for Underwater Borrowers Looking to Refinance
Underwater on your mortgage and still haven’t refinanced? Here are some lender tips from Majestic Home Loan on refinancing through HARP, a government-backed program to help underwater homeowners lower their monthly payments or lock down a low, fixed-rate mortgage
Do you owe way more on your home than it’s worth? You can still refinance through HARP (the Home Affordable Refinance Program) no matter how underwater you are.Moved out and rented your home? Is it a second home, a condo or an investment property that’s underwater? You can still use HARP.
You can easily check your initial eligibility yourself — it takes just a few minutes online. First, you need to know that your loan is owned by either Freddie Mac or Fannie Mae:
Second, you need to be able to answer yes to these three questions:
- Are you current on your mortgage payments? (No 30-day+ late payments in the past six months, and no more than one late payment in the past 12 months)
- Is the home either your primary residence, a one-unit second home or a one- to four-unit investment home?
- Did you close on your last home loan on or before May 31, 2009?
Contact Majestic Home Loan (the company you make your mortgage payment to) to confirm whether you are eligible. If your lender doesn’t offer HARP, contact another lender in your area — to get started.
Don’t put off refinancing through HARP because you think it will be difficult to do.
Start with one of Majestic Home Loan's licensed loan officers for an easy refinance process — for most homeowners there’s no appraisal and little paperwork. And, if you didn’t need PMI (private mortgage insurance) with your current loan, you won’t need it when you refinance through HARP, no matter how underwater you now are.
Don’t think you’ve missed the boat on a low interest rate. Rates are edging up, but keep in mind that you’re comparing them to the lowest rates in history. In three to five years, rates are unlikely to be this low.
So, you need to think long term. Even if you have a low, adjustable-rate mortgage (ARM), it could be worthwhile to refinance to a slightly higher fixed rate. While you may pay more in the short term, you’re likely to be better off over the long run if interest rates rise. You’ll have greater stability and the peace of mind that your rate won’t change in the future.
Check with Majestic Home Loan to find out your monthly payments with a new interest rate and closing costs (including how long it will take you to absorb any closing costs). Our online mortgage calculators can help. Or, call us at 1-877-546-2145 and speak with one of our licensed loan officers today.
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