State Heroes

The revised program known as HARP 2 is still expected to be introduced in March. With this program an appraisal may not be required so many homeowners who owe more on the house than the appraised value may still be able to refinance and lower their rates. Other variables such as credit score, debt ratios and mortgage payment history will apply. More details will be released when available.

We are excited about the revised refinance program effective March 1st, 2012. Once again, as long as no revisions are made between now and then, no appraisal will be required to refinance and lower your rate. There is no cash out allowed but you can include the closing costs and new escrow account. I am pleased to tell you that the reduced fees for our state heroes will apply to this new program.

The new HARP program is on its way. It will open the door for many homeowners who owe much more on their mortgage than the value of their home. The common term is “upside down” when you compare the debt to the value. This is not a program to cure past due accounts. It is to allow refinances to lower rates and consequently lower payments. No cash out is allowed. You can include principal balance on the loan and closing costs with an extra $250.00. Take advantage of this opportunity. It is scheduled to end in December 2013.

There is a new program coming soon to assist homeowners that owe more than the value of their home. It is designed to lower mortgage rates for homeowners who have been unable to refinance due to loan to value issues but now there is relief. Appraised value should not prevent refinance opportunities no matter how much more you owe on the house than it is worth. Your credit score should be 620 or more and you must not have been late on your mortgage more than once in the last 12 months. The program has not started yet but stay tuned because it is expected as early as December with closings in January 2012. It could be the beginning of a great New Year for many families.

Yes there is a 20 year amortization. If you have been paying on your mortgage for years and don’t want to start all over for another 30 years to lower the rate, take a look at a 20 year mortgage. The rate is usually a little better than the 30 year AND there is a chance you will have very little payment shock like you would experience on the 15 year loan. Your interest savings will amaze you and around 30% of your payment could go to principal. (The % could be less or more depending on loan size). Remember to comparison shop before selecting a lender. Closing costs are as important as rate. The lowest rate may not be the best choice if the closing costs are higher. Ask or calculate the cost recovery period.

There are still mortgage loans available with no required down payment if you are purchasing a home. If you are a veteran, the VA does not require a down payment. If you are not a veteran, the USDA program does not require one either. The house must be in an area approved for the USDA program. This financing opportunity is improving October 1st as the mortgage premium is dropping from 3.5% to 2%. If you have a small down payment or are able to obtain a gift from a family member, FHA still only requires a down payment of 3.5% of the purchase price. All of these loans are still available with no origination fee, no credit report fee, no broker fee.

Interest rates are close to the lowest levels I have seen in my 32 years in the mortgage business in Florida. If your payments are still too much for your budget on 15 year amortizations be sure to ask about 20 and 25 years. Remember, if you are refinancing your greatest savings will be in reducing the mortgage term - not just the rate. Also consider how long you will be staying in the house because recovery periods for the closing costs are also an important component of this decision. My favorite loan is the 20 year fixed rate. They often come with lower rates than the 30 year and no payment shock. Your payment is similar to what you are paying now except twice as much goes into equity (principal) instead of interest.

I am pleased to introduce Federal Title Insurance Agency, Inc in Florida and their President, Brenda Van Nest. They are excited about recognizing our state heroes by offering reduced fees to qualified applicants in Florida. Federal Title has agreed to reduce their closing fee, courier fee, E-doc fee and title search fee. Brenda and Federal Title can be reached at (321) 632-4871. Their web site is www.FederalTitleInsurance.com.

Is it more difficult to arrange financing for a condominium? Yes. In most cases, the condominium project has to be on the approved list for FHA or FNMA. If they are not on the list, financing may still be available through a portfolio lender but more than likely you will pay a higher interest rate, require a larger down payment and may have increased costs. Have your Realtor or mortgage lender send the condo association a condo questionnaire. The answers will provide the information necessary to determine what type of mortgage may be available.

There is talk that a 20% down payment may be required to purchase a home in the future. This applies to conventional financing only and is NOT in effect yet. There has been no indication that FHA down payments will change (now at 3.5% of purchase price) or that VA will require a down payment. There is a strong possibility however that the FHA loan limits will be reduced soon. Stay in touch and I will let you know when the changes are expected.