HOMEOWNERS who are still making payments on their mortgages might have hope to refinance their mortgage, even if the property value is lower than the loan balance. This is a step into the right direction, but still not the answer to most of your problems. Let me illustrate how many hoops you have to jump through to qualify:
You have to be an owner occupying the property by proof of taxes, the property has to be a Single Family residence, condo or 2-4 units.
You cannot have late mortgage payments within the last 12 months.
Your loan has to be guaranteed or owned by Fannie Mae or Freddie Mac, go to both websites and plug your info in.
Your first mortgage cannot exceed 125% of the current market value of your home. For example, if your property is worth only $400,000 and your balance is $500,000 or less on your first mortgage, you may be eligible. The current market value will be determined once you have applied for a refinancing with your lender.
Once you have determined if you are eligible for Home Affordable Refinancing, the next step is to see if your mortgage servicer is participating in the program. Call me at (562) 697-7028 or write to This e-mail address is being protected from spambots. You need JavaScript enabled to view it to check if they are participants -- a wide array of servicers have agreed, but not all.
You can go to this website: http://www.makinghomeaffordable.gov/about.html and see more options, for loan modification purposes as well.
Now, let’s see what else might slow you down on the home affordable refinancing process. After going through these minor hoops, we will then go into the actual loan qualifying process. We need to make sure that you do not have a second mortgage. I will explain why.
It’s called REFINANCING for a reason, because they will actually rewrite the note and change your entire term of mortgage, hopefully for the better. This means you will have to meet the debt to income (DTI) ratio that lenders require. Let me show you how to do a quick calculation of how much you can qualify for:
– Quick estimates :
– Loan amount of $400,000 Qualifying rate: 5% (varies)
– Payments: $2,700 with taxes & Ins. Revolving monthly debts: $250
– Minimum Fico Requirements: 640 (higher scores better-mtg. rates)
– Auto loan payments: $300 Estimated Value: $380,000
– Income needed to qualify: Estimated at $ 7,000.00 (Gross).
Many factors will affect qualifications of the loan, compensating factors will allow the DTI to go up to around 55%.
Another major hurdle is your second mortgage, if you have one. What will happen is that your second lender will have to qualify and allow you to receive a new first mortgage, “Re-subordination,” before you can go through this process. In my opinion and experience, no second lender will allow a “Re-subordination.” Or at least that is what I have been lead to believe. Please acknowledge or write to me if you have had any success with this Home Affordable Refinancing.
I have been getting more calls from homeowners who are in borderline hardship and are borderline qualified for “Loan Modification.” That is what I have been seeing and it’s really hard, because on paper they can still make their payments.
Here are my thoughts: the real estate market I strongly believe is starting to flatline, which is expected and preferred over declining property values. Therefore, again, in my opinion, if the market stays like this for the next two to three years, we shall start to see growth.
These are tough months ahead, so be frugal and conservative. Once we pass this last quarter, we should see things get better. Be careful with a lot of mortgage scams and loan modification rescue fraud schemes.
* * *
Call Ken Go of 1st Innovative Finance Group to give you a quote at (562)697-7028 or write to: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
(Advertising Supplement)
| < Prev | Next > |
|---|
