Thursday, October 22, 2009
Monday, October 19, 2009
New FHA refinance Rules
Posted on October 19, 2009
Want to refinance on the FHA Streamline Refi program? Better get a move on.
Beginning in just 4 weeks, the FHA changes over to new guidelines for its popular FHA-to-FHA refinance program.
Getting approved for a Streamline Refi will be more difficult and more expensive.
Summarizing the official FHA announcement, there are 3 areas in which the Streamline Refinance program is toughening up.
FHA homeowners must now be employed at the time of application
FHA homeowners must now verify household income
FHA homeowners must now have their homes appraised in order to "roll in" closing costs to the refinance
Compared to the current Streamline Refi guidelines, it's a landscape shifter.
See, until now, the FHA's refinance philosophy has been to help its homeowners however possible. It didn't matter whether a person was out of work, or whether he had his hours reduced, or even whether his home had lost 50% of its value. The FHA was all about lowering payments for its people.
So long as the homeowner had been paying the mortgage on-time, the FHA would just do the refinance -- few questions asked.
Effective next month, this changes. Underwriters for the new FHA Streamline Refinance program will be instructed to deny applications on the basis of employment, income, and assets.
No job? No money? No FHA loan. Under current guidelines, this isn't the case.
Furthermore, because (1) homeowners won't be able to roll in their closing costs without appraisal and (2) loan-to-values will be limited, people in highly-depreciated areas like Florida and Arizona may find streamline refis suddenly cost-prohibitive.
It's a terrible situation for the FHA homeowners that don't hear about these changes until it's too late.
Therefore, here's what to do. If you've got a FHA mortgage and you've been paying on-time, get yourself a streamline refinance quote against today's set of guidelines. Don't worry about the costs or by how much you'll lower your rate just yet -- the important part is just to get a non-obligation quote.
For the unemployed and furloughed, it's especially important.
Want to refinance on the FHA Streamline Refi program? Better get a move on.
Beginning in just 4 weeks, the FHA changes over to new guidelines for its popular FHA-to-FHA refinance program.
Getting approved for a Streamline Refi will be more difficult and more expensive.
Summarizing the official FHA announcement, there are 3 areas in which the Streamline Refinance program is toughening up.
FHA homeowners must now be employed at the time of application
FHA homeowners must now verify household income
FHA homeowners must now have their homes appraised in order to "roll in" closing costs to the refinance
Compared to the current Streamline Refi guidelines, it's a landscape shifter.
See, until now, the FHA's refinance philosophy has been to help its homeowners however possible. It didn't matter whether a person was out of work, or whether he had his hours reduced, or even whether his home had lost 50% of its value. The FHA was all about lowering payments for its people.
So long as the homeowner had been paying the mortgage on-time, the FHA would just do the refinance -- few questions asked.
Effective next month, this changes. Underwriters for the new FHA Streamline Refinance program will be instructed to deny applications on the basis of employment, income, and assets.
No job? No money? No FHA loan. Under current guidelines, this isn't the case.
Furthermore, because (1) homeowners won't be able to roll in their closing costs without appraisal and (2) loan-to-values will be limited, people in highly-depreciated areas like Florida and Arizona may find streamline refis suddenly cost-prohibitive.
It's a terrible situation for the FHA homeowners that don't hear about these changes until it's too late.
Therefore, here's what to do. If you've got a FHA mortgage and you've been paying on-time, get yourself a streamline refinance quote against today's set of guidelines. Don't worry about the costs or by how much you'll lower your rate just yet -- the important part is just to get a non-obligation quote.
For the unemployed and furloughed, it's especially important.
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