Fha Standard Refinance (Rate Reduction: Fill & Download for Free

Here is some updated information (August 2012) regarding refinancing underwater property:Fannie Mae or Freddie Mac owned loans (delivered before June 1, 2009): HARP 2 mortgage refinance.FHA owned loan: FHA streamline loan. There is a significant savings on the mortgage insurance premium if your loan was originated before June 1, 2009.VA loan: A VA streamline loan (also known as a IRRRL - Interest Rate Reduction Refinancing Loan.).HARP 3: There is currently a number of plans to enlarge the HARP refinance program, including the following proposals:·The Menendez-Boxer Responsible Homeowners Refinancing Act of 2012. which would expand the current HARP program by cutting out many of the red tape, such as credit checks and, appraisals.·President Obama’s #MyRefi program which would apply the easy refinance standards in the HARP program (as proposed in the Menendez-Boxer Bill) to all underwater borrowers who have an underwater loan, under $750,000, on a home they live in, and a credit score over 580.Sen. Merkley's Rebuilding American Homeownership, which call for refinanicing all underwater loans with easy credit qualifications. He proposes a 4%-year loan.These programs still have to be passed by Congress.I recommend that you read more detailed articles regarding eligibility requirements for the various loans at the Bills.com Web site.A minor correction to one of the answers: The Making Home Affordable Program includes the HARP program (for refinances), the HAMP program (for loan modifications) and the HAFA program (a short sale or a deed-in-lieu of foreclosure). The HAMP program, as noted, is for loan modifications.

It depends on what you mean by “bad credit.”If your FICO score is 620 or higher, you’ll likely be able to get a conventional mortgage. Most loans today are underwritten using an Automated Underwriting System (AUS). The two most widely used are Fannie Mae’s Desktop Underwriter and Freddie Mac’s Loan Prospector. Your loan officer will input your application, together with your credit report, to either of those systems. If you get an outcome of “Approve/Eligible” (Fannie) or “Accept” (Freddie), you’re almost there.Lenders will adjust the pricing of your loan according to your credit score. A borrower with a 620 score will pay approximately .625% more in rate than a borrower with a 740 score.If your score is lower than 620, you should first determine why it is at that level; you may be able to raise it significantly—and quickly—by resolving the conditions that are causing the low score. Look first at past-due balances and currently active collection accounts. In almost every case, paying them off or bringing those accounts current will raise your score dramatically. If you have public record items, like judgments, paying those off should also raise your score. One caveat: if collections or judgments are more than two or three years old, paying them off may actually lower your score, because they will be re-dated to the date you paid them off. Discuss the timing with your loan officer.Finally, look at your credit card balances. Any balances that are higher than 30% of the credit limit start to pull your scores down, even when they are paid as agreed. reducing the balances can also add points to your scores—sometimes by a lot.If your scores are below 620 and you don’t see any way to increase them, consider an FHA loan. This is a government-insured program with credit standards that are more forgiving than conventional programs. You can get a loan approved with a score as low as 580. There is a slight disadvantage to FHA in that you’ll pay mortgage insurance. This will be in two forms: the “up-front” premium of 1.75% which is added to the loan balance (not out of pocket) and the monthly premium, which is presently .85%. (semi-political side note: the monthly premium was scheduled to be dropped to .60% on January 27, but Donald Trump chose to rescind this reduction as his second official action, taken on Inauguration Day. This reduction would have saved $750 per year on a $300,000 loan. So much for taking care of the “regular people.” End of semi-political side-note)With an FHA loan, you can get a loan for as much as 96.5% of the appraised value of the property. Although the monthly mortgage insurance may seem pricey, FHA’s slightly lower rates compared to conventional partially mitigates it. In reality, an FHA loan with mortgage insurance will cost about .25% more than a conventional loan. It may actually be a little less expensive than a conventional in some cases because there are fewer rate adjustments for lower FICO scores.Hope this is helpful. Good luck!

An FHA loan is one that is insured by the Department of Housing and Urban Development (HUD). The loans themselves are underwritten and funded by mortgage lenders, then insured by HUD. Most FHA loans are ultimately sold to the Government National Mortgage Association (GNMA, or “Ginnie Mae”).The main requirements for loans that will be insured by HUD are these:For loans that are 96.5% of the property’s value, the borrower’s credit score must be 580 or higher. Borrowers with lower scores can theoretically get an FHA loan, but at a 90% loan to value ratio. Reality check: someone with a 500 score in all likelihood will have open collection accounts and public record items such as court judgments. A borrower must satisfy these items before final loan approval.The down payment (typically 3.5%) can come from the borrower’s own funds, a gift from a relative or an approved down payment assistance (DPA) program. In California, the California Housing Finance Agency (CalHFA) provides several programs for DPA, as well as for to help cover closing costs.Borrowers who have experienced certain events affecting their credit are subject to certain “seasoning” requirements (waiting periods):Foreclosure: 3 years after the trustee’s saleShort sale: 3 years after the saleBankruptcy (Chapter 7): 2 years after dischargeBankruptcy (Chapter 13): 1 year after dischargeThe appraisal procedure for a purchase involving an FHA loan is very slightly different from a conventional loan. The appraiser performs a cursory visual inspection of the property to identify any defects involving health and safety. Among these would be obvious termite infestation, bare wires, water leaks. If the appraiser notes termite infestation, the buyer will have to get a termite inspection. The seller will provide a termite clearance. This means that any active infection or infestation has been taken care of. If the appraiser does not observe any termite activity, the buyer won’t have to get a pest control inspection.If the loan will be for a condominium, HUD will insure it only if the development has been approved for FHA financing. HUD provides a searchable database for anyone to find out whether a particular complex is approved.FHA financing is NOT restricted to first-time buyers or those of “lower” income.FHA loan limits vary by state and county. HUD maintains a searchable database to determine those loan amounts. The limit is $275,665 in the lowest priced areas, $636,150 in the highest priced areas, such as many counties in California. Those limits may go as high as $954,225 in a handful of very high priced areas: Alaska, Hawaii, Guam and the Virgin Islands. These are for single-family homes. The limits are higher for 2–4 unit properties.FHA loans require mortgage insurance (MI). It is paid in two ways: an initial, up-front payment (currently 1.75% of the base loan amount) and an annual renewal, currently paid monthly at the rate of .85% of the base loan amount. A $400,000 home with a $386,000 loan (96.5%) would have an up-front payment of $6,755, This is not an out-of-pocket expense, as it is added to the base loan amount. For that $400,000 property, the total loan amount would be $392,755 (386,000 + 6,755 = 392,755).The monthly mortgage insurance premium of .85% for the same property would be $273.42 per month. (Note: outgoing HUD Secretary Julian Castro had scheduled a reduction in the monthly MI to .60% from .85%. This would have saved nearly $1,000 per year for a $400,000 purchase. The justification for this reduction was that the MI fund, which Congress mandates to be 2% of the outstanding loan portfolio, had grown for three years in a row. It stood at 2.32% at the time of the order. The incoming president, Donald Trump, rescinded that reduction by Executive Order as his second official act. Just sayin’.)FHA Mortgage insurance must remain in place for the life of the loan, so the only way to remove it is to refinance into a conventional loan.Although most collection accounts must be resolved, medical collection accounts are generally excepted. Borrowers who have had judgments entered against them must either satisfy the judgments or document that they have entered into payment arrangements with the judgment creditor. HUD has published a detailed explanation of their policies regarding these.In community property states (like my state of California), the debts of a non-borrowing spouse have to be included in the calculation of debt ratio—even though the spouse’s income is not used in the approval.FHA can be a good problem-solver in several different situations:A buyer has credit too low for a conventional loan—or credit low enough that the rate of a conventional loan would be higher than the total cost of an FHA loanIncome is not quite high enough for a conventional loan. FHA underwriting standards are more relaxed than conventional guidelines.I hope this is useful. Good luck!