San Mateo Mortgage Blog » Refinance

FHA Streamline Refinance Guidelines Changing in 2010

Chris Williamson — Wed, 23 Sep 2009 01:10:01 +0000

New FHA Guidelines for Streamline Refinance in 2010

Under today’s 2009 FHA streamline refinance guidelines, homeowners with FHA mortgage loans are able to lower their monthly mortgage payment when FHA reduces the interest rate. Today’s guidelines allow homeowners to refinance without an appraisal or verifying income and assets with fast turnaround times. Even homeowners with low credit scores and no jobs are eligible. FHA figured since they were insuring the mortgages to begin with, helping homeowners lower their monthly mortgage payment which in turn should lower their risk of foreclosure.

What’s Changing with FHA Streamline Refinances in 2010?

In a letter from The Office of Housing and Urban Development dated September 18, 2009, the guidelines for 2010 FHA streamline refinances, effective January 1, 2010, are changing drastically. The biggest changes to the FHA streamline refinance are:

FHA homeowners must be employed when they submit their FHA streamline refinance loan application
FHA homeowners will be required to verify assets needed at closing
FHA homeowners must have a full appraisal done in order to add “roll-in” closing costs to the refinance
The maximum mortgage amount for a streamline refinances without an appraisal cannot exceed the outstanding principal balance and the new upfront mortgage insurance premium
For streamline refinances with an appraisal, discount points (buying down the interest rate) can no longer be rolled into the new mortgage

2009 Streamline Refinance vs. 2010 Streamline Refinance

2009 Streamline	2010 Streamline
No appraisal	Appraisal is recommended
No maximum loan-to-value	Max loan-to-value to 97.75%
No asset verification	Assets verified
No income verification	Income verified
Low credit scores ok	Higher credit scores required
Quick closings	No quick closings

What Does this Mean to a San Mateo Homeowner with an FHA Loan?

If you currently have an FHA loan, you should explore whether or not it would be beneficial for you to do a streamline refinance in 2009 before the guidelines change. Start this as soon as possible to make sure you can take advantage of the 2009 FHA streamline refinance guidelines.

How Do I Determine Whether or Not I Would Benefit?

With some basic information about your FHA loan, we’ll be able to help you determine whether or not you’d benefit from a 2009 FHA Streamline Refinance. If you won’t benefit, we’ll tell you. Then, we’ll put your information into our loan analysis software and when we can help you, we’ll call you. No need for you to monitor the San Mateo mortgage market.

Need an FHA Streamline Refinance Before the Rules Change?

Are you a California homeowner with an FHA home loan? Give me a call at (650) 520-0915, send me an email at info@SanMateoMortgageBlog.com with your loan information and we’ll tell you if you can save money with a 2009 FHA Streamline Refinance. Alternatively, you can submit your information through our secure online mortgage application. We’ll analyze your loan situation and call you with some answers.

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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.

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The New Appraisal Process

Chris Williamson — Sat, 13 Jun 2009 01:12:04 +0000

Effective May 1, 2009 a new appraisal process for Bay Area homes went into effect, called the Home Valuation Code of Conduct. This new Code requires a third party service to schedule an appraisal and claims to provide enhanced protections for homebuyers, mortgage investors and the housing market. It used to be when a buyer had an accepted contract on a house, or when a home owner was in the process of a refinance, the lender would call a local appraiser to schedule an appraisal of the home. Now, the lender must call a third party service who will randomly select an appraiser and send them out.

So… What’s the Problem?

Even though this system has been in place for a month, we’ve heard several horror stories so far. Some lenders are farming their appraisals out to out of area appraisers who charge less, but don’t necessarily know the area. Thus, the home may not be accurately assessed by a local professional with local real estate market knowledge and expertise. Also, some lenders have been known to take 12-14 days to get an appraiser out there. When you have a financing contingency of 14 days, it doesn’t give much time to work out any problems that could arise and you (or your client) could lose the house of their dreams.

How Does Our System Ensure You Won’t Experience Any of These Problems?

Our system only orders appraisals from appraisers who meet our strict guidelines for costs and turn times. Plus, we only order appraisals from appraisers who service the property’s zip code, not just county, which eliminates the chance of getting an out of area appraiser who is not familiar with the local real estate market. We also have a department dedicated to expediting reports and reducing costs and turn times.

Want to Make Sure None of These Horror Stories are Your Stories?

Don’t trust your next transaction with a lender who could jeopardize its success. Please give me a call or send me an email to discuss these new regulations and how we can work together to ensure its effects are minimal.

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One Last Chance to Refinance at Historic Low Interest Rates

Chris Williamson — Wed, 20 May 2009 16:30:48 +0000

If you have been sitting on the fence waiting for the right time to refinance, you definitely fell off the fence this past week as rates rose above 5%. Did you miss your opportunity? Are you starting to kick yourself because refinancing is as attractive as it was a couple of weeks ago? Well hold off on beating yourself up. You may have one last shot at the refinance boom of 2009.

Think Back to December 2008

Let’s turn back the clock to December 2008 when the Fed announced that they were pledging 1.25 trillion dollars to the mortgage markets, rates dropped overnight. This kept the rates low into the new year and have been holding steady at these low limits until now. The commitment to buy mortgage bonds was to last until June and now you are starting to see the rise in rates again as we finish out May. The Fed does not want this rise in rates, at least not yet!

You May Have One More Chance!

Looking at how rates have gone up over the last couple of weeks, I can see two things happening. Accelerating the rate at which mortgage bonds are being bought (there is still about $820 billion left to spend) and/or the Fed pledging more money to purchase bonds. Either outcome will cause rates to drop.

Don’t Let this Opportunity to Save Thousands Pass You By!

If you are sitting around crying in your Cheerios thinking you missed out on a great opportunity, it’s time to suck back those tears, and get your application in. This may be your last great opportunity to refinance in the historic refinance boom of 2009.

How Can I Be Sure to Take Advantage of Some of the Lowest Interest Rates in History?

To apply, please contact me or apply online with our secure online mortgage application.

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What Should I Bring to My First Appointment with a Mortgage Advisor?

Chris Williamson — Wed, 13 May 2009 21:01:09 +0000

What is My Mortgage Advisor’s Job?

Your Mortgage Advisor’s job is to put together a package of supporting documentation that show you are a worthy borrower to a lender. To put you in your very best light, the Mortgage Advisor will first need your personal information to verify employment for you and your co-borrower (if there is one). They will also need information regarding all of your debts and assets.

How Can I Make the Meeting More Productive and Beneficial?

To make your first meeting with a Mortgage Advisor more productive and beneficial for you, it is important you come prepared. You can save yourself a lot of time and hassle during the home financing process by bringing a few relevant documents to your first meeting.

What Should I Bring?

You should gather the following supporting documentation to bring to your first meeting:

Most recent paystubs covering the last month including year-to-date
W2s from the previous two years if you are a salaried employee
If you are self-employed, a year-to-date profit and loss statement for each business you own
Signed copies of your last 2 years’ tax returns, including all schedules that were filed
Most recent bank statements for 2 months including all pages, even the blank ones
Most recent statements from any retirement and investment accounts for 2 months

Additional Documentation for Home Buyers

For home buyers, you will need to show the source of your down payment. If you’re down payment will come from:

Your savings or checking account – Bring copies of the statements from the most recent 2 months (including any blank pages)
A gift – We will need a gift letter from the donor on a form that we will provide and verification of the source of the funds. The gift letter will state that the funds are a true gift and will not have to be repaid. Your donor will have to show 2 months bank statements for the account the funds are coming from. You will also have to document the transfer of funds from the donor’s account to your account.

Additional Documentation for Home Owners Refinancing

Additional items to bring if you are refinancing your home:

Homeowner’s insurance company name and number
Copy of the Promissory Note from any second mortgage or equity line that will not be paid off with the refinance

Miscellaneous Income Items Needed (Only If Applicable to You)

Additional income items that you should bring if they apply to you:

Rental Income – Bring copies of the leases for the previous 2 years
Alimony and Child Support Income – Bring a copy of recorded Divorce Decree and Settlement Agreement
Social Security/Pension/Disability Income – Copy of the Award Letter and copies of bank statements for the previous 2 months reflecting amounts deposited monthly.

If you bring the documentation that applies to you from this list, you will be well on your way to a speedy pre-approval. Occasionally, the lender may ask for more supporting documentation once they review your file and we will work with you to collect and prepare any other documentation if necessary.

What Should You Do if You Have More Questions?

If you have any questions about what a lender requires or how each of these documents apply to your specific situation, please don’t hesitate to contact me.

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No Money to Put Into Home Repairs? No Problem!

Chris Williamson — Tue, 28 Apr 2009 03:27:29 +0000

When a property does not meet the minimum standards required by a lender, rehabilitation is involved. Typically, this means a lender will not make a long term loan on the property until the improvements are complete. In the past, the only way to do this would be with a construction loan which comes with high costs and short terms. This program is not a cost effective solution for the regular homeowner.

Why is This So Important Today?

Recently, we are seeing more and more foreclosures come onto the market. Often times, the owners remove things such as appliances, carpets, sinks and toilets and do not fix other items (i.e. holes in the wall, damaged floors) when they leave. When the bank puts these homes onto the market, they are sold “as-is” meaning the bank will not make any repairs to the property. For a buyer who may not have a lot of extra cash after their down payment and closing costs, they would not be able to consider purchasing a home that needs work. Number one, a lender will not lend on a home in disrepair with no appliances, sinks or toilets. Number two, even if they did make a loan on the purchase price of the property that still would not make the home habitable. The borrower would have to get money somewhere to repair the property.

Buyers Who Can’t Afford to Do Repairs…There is Help!

There is a loan product that will help the average person finance the cost of the repairs into one long term purchase loan called the FHA 203(ks). This is a government insured loan that will finance up to $35,000 in the purchase loan (no second loan, construction loan, etc) to fix cosmetic repairs. Not just for REO’s and short sales (although they are usually great candidates), this loan will finance any property in disrepair.

What Repairs Are Eligible?

All health, safety and energy conservation items must be addressed prior to completing general home improvements.

A homeowner can use the 203(ks) program to finance such items such as:

Room additions
Drainage issues and gutters
Roof
Upgrade HVAC and plumbing
Waterproofing and weatherization
Rehab or refinish basements
Upgrade energy efficiency and electrical
Kitchen or bath remodels including appliances
Decks, porches, terraces and patios
Replace windows, doors and skylights
New flooring, tile, paint, wallpaper and more
Handicapped accessibility improvements
Install, repair or replace well or septic

What is Not Eligible?

Luxury items such as:

Exterior hot tub, sauna or spa
Outdoor fireplace or BBQ
Swimming Pool
Satellite Dish
Tennis Court

How Is the Work Approved? When Does It Have to Be Complete?

The necessary repairs must be noted in the appraisal and you need a detailed contractor bid. The property closes as is and the repairs must begin within 30 days and be completed within 6 months of closing.

Is this Loan Available for a Refinance if I Already Own a Home?

Yes! If you are a homeowner who needs to do some repairs on your property, you can refinance into an FHA 203(ks) and get up to $35,000 to do cosmetic repairs on your home.

How Can I Apply?

If you are a homeowner with a home already, or a buyer who thinks they may purchase a home that needs some TLC, call me today for a free no obligation consultation.

Want More Info?

Fill out the form below and we will send you our FHA 203(ks) – How is It Different? Guide.

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12 Biggest Mistakes Consumers Make When Refinancing

Chris Williamson — Mon, 06 Apr 2009 22:17:07 +0000

With all the buzz surrounding San Mateo mortgage refinances lately, I have received a lot of questions asking for refinance tips. Bottom line, there are right reasons and wrong reasons to refinance your mortgage. And…when you see too good to be true interest rates, you should ask a lot of questions and get everything in writing (including closing costs) to make sure you aren’t way overpaying in fees.

In the Mortgage Refinancing Mistakes to Avoid guide, I detail 12 common mistakes San Mateo homeowners make when refinancing their mortgage loans and how you can avoid them for a smooth transaction. Here are 2 out of the 12 mistakes to get you started:

Mistake #3: Only Considering the Mortgage Interest Rate When Choosing a Lender

All too often, people choose a lender for the wrong reason. They call around asking for today’s interest rates and decide to go with the person who quotes them the lowest rate over the phone. Although this may sound like the best way to shop for a loan, you could end up paying much more with extra and/or higher fees and charges. Not to mention, unless you have a pre-approval in hand and have already submitted your documentation to a lender, it doesn’t matter what today’s rates are. Rates change every single day and maybe even several times per day and unless you are ready to move forward now, today’s interest rates mean nothing to you.

To protect yourself from paying too much, ask your lender to put everything in writing. We provide our clients a detailed Good Faith Estimate with all of the costs and fees they will pay to close the loan so they can compare our costs with other companies. If your lender will not give you the costs in writing, you should find another lender.

Tip: Don’t just consider the interest rate when choosing a lender. Get their quote (Good Faith Estimate) in writing to compare all of the fees and charges to know if you are really getting the best deal.

Mistake #4: Not Working with a Lender that Will Alert You When There is an Opportunity to Save Money After Closing

When you choose to go forward with The Chris Williamson Team, our service does not stop at closing. We input your loan information into our Mortgage Monitoring System and when there is an opportunity for you to save money on your monthly mortgage payment, or when another loan program would be more suitable for your financial goals, or when you can cancel your mortgage insurance, we will let you know. We also have a yearly mortgage review with each of our client’s so we can evaluate their financial situation to see if any changes need to be made.

Tip: Work with a Mortgage Advisor whose service does not stop when the loan closes. Also, ask your Mortgage Advisor if they will alert you when there is an opportunity for you to save money on your mortgage.

To get a copy of the complete, Mortgage Refinancing Mistakes to Avoid guide please fill out the form below and it will be emailed to you immediately.

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Auto Lock Program Ensures a Seamless Refinance

Chris Williamson — Thu, 19 Feb 2009 22:14:39 +0000

So you hear the news, mortgage rates are falling. You start looking at rates online and think you could really save some money if you refinanced your home. You call your lender and he gives you a list of the documentation to prepare. It takes you a few days to get your information together. You call him when you are ready and he says, great, but rates have gone back up. Frustrated, you put everything away and stay with the loan you have. Sound familiar?

How Can You Be Sure Not to Miss Out when Mortgage Rates Drop?

The best way to capitalize on rate drops is to submit a complete file to your lender before rates drop. Submitting a complete file simply means that all of the necessary documentation has been received, processed and approved by a lender. Then, get back to your daily life and let your Mortgage Advisor shop rates. When rates drop below your current rate, he should call you and ask if you want to lock the rate and go through with the refinance or wait to see if rates drop any further. Submitting your file does not require you to refinance your home, but does put you in a much better position when rates do drop.

Why is Submitting the File Before I am Ready Better?

Because all of your paperwork has already been received and approved by the lender, your file is on the top of the pile when you do decide to lock your rate. As you can imagine lenders are inundated with files when rates drop. When rates are really good lenders can get so many files that they simply cannot process and complete all of them by the lock dates and some may lose the interest rate even if they submitted all their documentation. When your file has already been received, processed, and approved all the lender needs to do is execute the loan.

Never Want to Watch Mortgage Rates Again?

One of the services we offer our clients is our Auto Lock Program. We collect the necessary documentation, even before the client is even ready to refinance, and we give our clients the option to sign an auto lock form. The auto lock form allows our clients to pick a target rate that would cause them to refinance their loan. When that rate becomes available, they are automatically locked in allowing them to take advantage of the narrow window of low interest rates. Having our clients submit their documentation ahead of time, combined with signing the auto lock form will enable our clients to take advantage of every cost saving opportunity.

If you would like to never worry about shopping for mortgage rates or programs, give us your name and email and we will send you some additional information. This service is available to every home owner, no matter who originated your loan.

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Why Some Home Owners Decide not to Refinance

Chris Williamson — Thu, 16 Oct 2008 23:50:45 +0000

Refinancing into a lower rate is a great option for many home owners, but in today’s lending world of tighter guidelines, it may not always be possible. If the home owner doesn’t have enough equity in their home or has credit issues or recently experienced a hardship like the loss of a job, the lender may not refinance the current San Mateo mortgage loan.

Another reason a homeowner may not refinance to a lower rate are due to the costs related to refinancing, which can range from 2-3% of your loan amount. You have to determine how long it will take you to recoup your money and if the new loan program aligns with your financial goals before you consider refinancing your current San Mateo mortgage loan.

For example, if you currently have a 30 year fixed rate home mortgage with a $700,000 loan amount and a 7% interest rate, you are paying $4,657 for principal and interest per month. If your current loan balance is $660,000 and you refinance at to 6.5% interest rate, you will be paying $4,171. This is a monthly savings of $486 per month. If the closing costs are 2% or $13,200, it will take you 27 months to recoup your money. For home owners planning on staying in their San Mateo home for three or more years, it may make sense to refinance. It is also possible to include the closing costs in your new San Mateo mortgage to alleviate the upfront costs, but again, you still have to determine the time to recoup this money and if the benefits are aligned with your overall financial plan.

I hope I was able to clear a few things up for Tyler and you as well. If you have additional questions about refinancing or wondering if it’s time for you to refinance, send me an email or take a look at The Mortgage Adoption Center. In the meantime, I have a great audio CD that I would love to share with you called Home Equity Myths with Douglas Andrew, the author of the popular book Missed Fortune: Dispel the Money Myth-Conceptions – Isn’t it Time You Became Wealthy? In this CD, Douglas dispels many common myths about managing your home’s equity. If you would like a copy, send me an email and I will get the CD out to you.

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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.

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