1. The IRS tax credit refund can be made only to the taxpayer and not a third party.
2. Government agencies may offer tax credit advances with second liens.
3. The buyer cannot get cash back through the tax credit advance.
4. The 2nd lien may not exceed the down payment, closing costs, and prepaid expenses.
5. The 2nd lien may be "soft" or require payments.
6. Payments on 2nd liens must be included in ratios unless deferred for at least 36 months.
7. Balloon payments on 2nd liens may not be before 10 years.
8. FHA approved lenders and FHA approved non-profits may purchase the tax credit.
9. Tax credit purchaser may not charge more than 2.5% of the tax credit as a fee.
10. IRS may deduct from the tax credit: unpaid student loans, tax liens and garnishments.
You only have till December 1st, so take action.
Read this "http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-15ml.doc"update in its entirety.
Get the "http://www.irs.gov/pub/irs-pdf/f5405.pdf"IRS tax credit form 5405.
Read"http://www.irs.gov/newsroom/article/0,,id=204671,00.html"IRS tax credit summary.
Wednesday, June 3, 2009
Everyone Wants a Lower Price, But What About the Impact of Interest Rates?
When shopping for a home, the natural tendency of any buyer is to want to pay the lowest price possible. It's important to keep in mind, however, that the sales price is not the only factor that determines what the monthly payment will be.
In fact, the impact of higher interest rates can easily nullify any benefit of waiting for a lower price. Why Should I Rush to Buy?While you may have heard discussions in the media about the decline of property values in many markets, the rate of decline appears to be stabilizing. That being said, it would not be unreasonable for buyers to want to hold out for an additional decline of 10%, hoping to capture the best possible price.
However, as property values have declined in many areas to 2003 levels or lower, waiting longer to pull the trigger could be a mistake. Many markets are reporting that lower property values have been bringing out investors and the result has been multiple offers on many properties.
Properties priced correctly are not declining and, in fact, are creating a lot of interest. Interest Rate ComplacencyThe problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan.
But buyers shouldn't be confused by this. These rates are artificially low! Historically, interest rates have been above 6.00%. And any rate obtained below this number is a great deal, especially on homes with price tags from 2003! Markets are UnforgivingThe last two weeks of May showed just how unforgiving the markets can be for people who choose to procrastinate. In just five days, interest rates from many lenders increased anywhere from .50% to 1.00% as fixed-income investors demanded more for their money.
For anyone who was waiting for prices to drop even more, a 1.00% increase in interest rate would bring a higher monthly principal and interest payment on a home, even if the price of that same home had fallen an additional 10% in value. If your clients are waiting for prices to fall even lower, be aware that while holding out for a lower price may help them win the battle, they could lose the war in terms of monthly payments and overall affordability.
With the Federal Reserve scheduled to end its buying of mortgage-backed securities this year, rates only stand to go higher for those that wait. In fact, interest rates are already on the rise and could go higher from here. Clock is Ticking on Free MoneyIf you have clients who are planning on purchasing their first home this year, be sure to let them know that they need to take possession before 12/01/2009 to be eligible for a tax credit of up to $8,000. In a survey conducted in March by Move.com, nearly 50% of home buyers are currently unaware that this free money exists in the marketplace. And since over 50% of all buyers are first-timers in today's market, this could impact a lot of your clients. If you have questions about this update, give us a call. I can show you how waiting for the lowest price could really cost your clients more in the long run.
Sincerely,
Ron Boltonuniting
people with possibilities
(251)721-5626
In fact, the impact of higher interest rates can easily nullify any benefit of waiting for a lower price. Why Should I Rush to Buy?While you may have heard discussions in the media about the decline of property values in many markets, the rate of decline appears to be stabilizing. That being said, it would not be unreasonable for buyers to want to hold out for an additional decline of 10%, hoping to capture the best possible price.
However, as property values have declined in many areas to 2003 levels or lower, waiting longer to pull the trigger could be a mistake. Many markets are reporting that lower property values have been bringing out investors and the result has been multiple offers on many properties.
Properties priced correctly are not declining and, in fact, are creating a lot of interest. Interest Rate ComplacencyThe problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan.
But buyers shouldn't be confused by this. These rates are artificially low! Historically, interest rates have been above 6.00%. And any rate obtained below this number is a great deal, especially on homes with price tags from 2003! Markets are UnforgivingThe last two weeks of May showed just how unforgiving the markets can be for people who choose to procrastinate. In just five days, interest rates from many lenders increased anywhere from .50% to 1.00% as fixed-income investors demanded more for their money.
For anyone who was waiting for prices to drop even more, a 1.00% increase in interest rate would bring a higher monthly principal and interest payment on a home, even if the price of that same home had fallen an additional 10% in value. If your clients are waiting for prices to fall even lower, be aware that while holding out for a lower price may help them win the battle, they could lose the war in terms of monthly payments and overall affordability.
With the Federal Reserve scheduled to end its buying of mortgage-backed securities this year, rates only stand to go higher for those that wait. In fact, interest rates are already on the rise and could go higher from here. Clock is Ticking on Free MoneyIf you have clients who are planning on purchasing their first home this year, be sure to let them know that they need to take possession before 12/01/2009 to be eligible for a tax credit of up to $8,000. In a survey conducted in March by Move.com, nearly 50% of home buyers are currently unaware that this free money exists in the marketplace. And since over 50% of all buyers are first-timers in today's market, this could impact a lot of your clients. If you have questions about this update, give us a call. I can show you how waiting for the lowest price could really cost your clients more in the long run.
Sincerely,
Ron Boltonuniting
people with possibilities
(251)721-5626
$8,000 Tax Credit and FHA loans
This is a general explanation of how the program works.
Here are the steps for taking advantage of the tax credit:
1. Homebuyer must be qualified based on income
a. The maximum amount is available at an annual income of $75,000 Single or $150,000 Married Filing Joint
b. The maximum income to get the tax credit is $95,000 Single or $170,000 Married Filing Joint
i. As the income goes above $75,000/$150,000 the credit is reduced until the income reaches the maximum $95,000/$170,000, then they are no longer eligible.
c. Cannot have owned a home in past 36 months from the date of the transaction closing
2. The tax credit is up to $8,000 at the maximum or 10% of the sales price.
a. It will always be the lesser of the two.
b. Remember above $75,000/$150,000 the tax credit amount diminishes.
3. You must find a government sponsored program (above is a link to those in place now) that offers to monetize the tax credit.
a. This is basically some sort of bridge loan that gives the home buyer a loan against the tax credit in advance
b. Some programs are second liens against the subject property and the CLTV can go up to 100% of acquisition cost.
c. Other programs could be loans secured against the refund itself.
4. The home buyer then closes on their transaction.
5. The home buyers files an amended return using a CPA or tax preparer (called a 1040X) for their 2008 tax return or they could wait until they file their 2009 tax return.
a. Filing an amended return on 2008 Federal Taxes will get them their tax credit refund the fastest.
6. When the check comes in from the IRS they pay the bridge loan in full.
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-15ml.doc (This link will open the Mortgagee Letter)
FHA Released the above mortgagee letter this morning. It completely explains the tax credit.
Here are the steps for taking advantage of the tax credit:
1. Homebuyer must be qualified based on income
a. The maximum amount is available at an annual income of $75,000 Single or $150,000 Married Filing Joint
b. The maximum income to get the tax credit is $95,000 Single or $170,000 Married Filing Joint
i. As the income goes above $75,000/$150,000 the credit is reduced until the income reaches the maximum $95,000/$170,000, then they are no longer eligible.
c. Cannot have owned a home in past 36 months from the date of the transaction closing
2. The tax credit is up to $8,000 at the maximum or 10% of the sales price.
a. It will always be the lesser of the two.
b. Remember above $75,000/$150,000 the tax credit amount diminishes.
3. You must find a government sponsored program (above is a link to those in place now) that offers to monetize the tax credit.
a. This is basically some sort of bridge loan that gives the home buyer a loan against the tax credit in advance
b. Some programs are second liens against the subject property and the CLTV can go up to 100% of acquisition cost.
c. Other programs could be loans secured against the refund itself.
4. The home buyer then closes on their transaction.
5. The home buyers files an amended return using a CPA or tax preparer (called a 1040X) for their 2008 tax return or they could wait until they file their 2009 tax return.
a. Filing an amended return on 2008 Federal Taxes will get them their tax credit refund the fastest.
6. When the check comes in from the IRS they pay the bridge loan in full.
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-15ml.doc (This link will open the Mortgagee Letter)
FHA Released the above mortgagee letter this morning. It completely explains the tax credit.
Wednesday, April 1, 2009
8000 First Time Homebuyers Tax Credit
Tax Credit for Homebuyers First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.
Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Tax Credit Versus Tax Deduction
It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing. Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!
Phaseout Examples
According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:
Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.
Homes that Qualify
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.
Higher Loan Amounts
More good news - there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.
Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs - This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings - This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing-This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance-This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
More Help for Homeowners in the FutureAnother thing to keep an eye on in the coming weeks is President Obama's plan to help struggling borrowers before they are faced with a default on their mortgage.
According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.
While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That's because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.
Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Tax Credit Versus Tax Deduction
It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing. Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!
Phaseout Examples
According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:
Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.
Homes that Qualify
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.
Higher Loan Amounts
More good news - there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.
Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs - This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings - This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing-This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance-This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
More Help for Homeowners in the FutureAnother thing to keep an eye on in the coming weeks is President Obama's plan to help struggling borrowers before they are faced with a default on their mortgage.
According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.
While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That's because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.
Monday, December 1, 2008
Borrower Orentation - New Mortgage
There are 13 Steps to every mortgage loan.
Every step is crucial in obtaining your home loan. This new client orientation will reveal the process step by step so your loan expectations are met or exceed at the end of this process.
A FHA or Conventional refinance loan should never exceed 20 days from processing submission to the closing. In todays financial market we together face unforeseen obstacles. With this being said we will work as fast as possible in securing your new home loan.
1. Prequalification:
• Credit History will be obtained by us
• Debt/Income ratios are determined by requesting income documents
• Assets will be discussed to verify minimum reserves needed
• Loan To Value is assessed via property value reports we obtain for you
• If you are purchasing a new home we will discuss down payments
• Types of Financing custom tailored to your needs are discussed
2. The Application:
After the above actions are taken, the application is initiated and sent out for you review and signatures
• If you have filled out a online application we will review and add any missing areas for you
• We will order an appraisal only after verifying minimum property value
• Title will be ordered and a place of covenant closing with be decided upon
3. Your Loan Officer will submit the package to a Loan Processor only after receiving the signed application and requested items to complete your loan.
• Verifications of Deposit, Assets, Employment, Rent or Mortgage history, are ordered and faxed to the appropriate institutions or individuals
• Your Loan Application is analyzed by the Processor.
• Your Appraisal is received and final value is inputted
• Your Title will be sent back and corrected for underwriting
• A current payoff will be obtained reflecting odd days interest
4. Once all of the necessary underwriting conditions are received by the processor, your loan will be submitted to underwriting.
5. Underwriting Approval is issued ( some times with conditions)
• The Underwriter approves the loan
• If further conditions are stipulated the processor will contact the appropriate party’s to satisfy the out standing condition
6. Your Interest Rate will be locked- this can be locked at any time during the loan process , based on current markets your loan officer will advise
7. Your loan is issued a Clear 2 Close
8. Your loan officer will contact you to schedule a convenient time for you to close. The loan officer will schedule with the closing attorney and lender to insure all parties are able to meet the date and time of you closing.
9. Your Closing instructions and loan Documents will be sent via email to the closing attorney
10. The closing attorney will prepare the HUD and forward it to the loan officer for review. The loan officer will also contact you to review the final numbers
11. Your Loan Documents will be signed by you- If you are purchasing a new home any Down Payment money must be brought via certified funds.
12. Your signed loan documents are sent back to the lender.
13. If your loan is a new purchase and or a refinance of a 2nd home your loan funds will be disbursed immediately. If your loan is a refinance of an owner occupied property you will have a 3 day right of rescission. (i.e. the only day that does not count as a recession day is Sunday)
Every step is crucial in obtaining your home loan. This new client orientation will reveal the process step by step so your loan expectations are met or exceed at the end of this process.
A FHA or Conventional refinance loan should never exceed 20 days from processing submission to the closing. In todays financial market we together face unforeseen obstacles. With this being said we will work as fast as possible in securing your new home loan.
1. Prequalification:
• Credit History will be obtained by us
• Debt/Income ratios are determined by requesting income documents
• Assets will be discussed to verify minimum reserves needed
• Loan To Value is assessed via property value reports we obtain for you
• If you are purchasing a new home we will discuss down payments
• Types of Financing custom tailored to your needs are discussed
2. The Application:
After the above actions are taken, the application is initiated and sent out for you review and signatures
• If you have filled out a online application we will review and add any missing areas for you
• We will order an appraisal only after verifying minimum property value
• Title will be ordered and a place of covenant closing with be decided upon
3. Your Loan Officer will submit the package to a Loan Processor only after receiving the signed application and requested items to complete your loan.
• Verifications of Deposit, Assets, Employment, Rent or Mortgage history, are ordered and faxed to the appropriate institutions or individuals
• Your Loan Application is analyzed by the Processor.
• Your Appraisal is received and final value is inputted
• Your Title will be sent back and corrected for underwriting
• A current payoff will be obtained reflecting odd days interest
4. Once all of the necessary underwriting conditions are received by the processor, your loan will be submitted to underwriting.
5. Underwriting Approval is issued ( some times with conditions)
• The Underwriter approves the loan
• If further conditions are stipulated the processor will contact the appropriate party’s to satisfy the out standing condition
6. Your Interest Rate will be locked- this can be locked at any time during the loan process , based on current markets your loan officer will advise
7. Your loan is issued a Clear 2 Close
8. Your loan officer will contact you to schedule a convenient time for you to close. The loan officer will schedule with the closing attorney and lender to insure all parties are able to meet the date and time of you closing.
9. Your Closing instructions and loan Documents will be sent via email to the closing attorney
10. The closing attorney will prepare the HUD and forward it to the loan officer for review. The loan officer will also contact you to review the final numbers
11. Your Loan Documents will be signed by you- If you are purchasing a new home any Down Payment money must be brought via certified funds.
12. Your signed loan documents are sent back to the lender.
13. If your loan is a new purchase and or a refinance of a 2nd home your loan funds will be disbursed immediately. If your loan is a refinance of an owner occupied property you will have a 3 day right of rescission. (i.e. the only day that does not count as a recession day is Sunday)
Tuesday, November 25, 2008
Mobile Alabama Made Another Top 10 List
Top 10 Most Promising Housing Markets
Housing Predictor, which provides housing forecasts in 250 markets, has identified 10 markets where the regional economies are healthy and have strong potential for increasing prosperity.
These housing markets have bucked the national trend in 2008 and avoided the subprime crisis, the consultancy says.
Whatever the future holds for the housing market as a whole, Housing Predictor forecasts that these cities will continue to see steady, dependable growth.
Top cities and the percentage sales prices have increased so far in 2008.
Biloxi, Miss., 4.9 percent
Salem, Ore., 4.7 percent
Bismarck, N.D., 4.6 percent
Spokane, Wash., 4.4 percent
Yakima, Wash., 4.1 percent
Austin, Texas, 4.0 percent
Grand Junction, Colo., 4.0 percent
Fargo, N.D., 4.0 percent
Mobile, Ala., 3.9 percent
Albuquerque, N.M., 3.5 percent
Source: Housing Predictor (11/15/08) From www.realtor.org
Housing Predictor, which provides housing forecasts in 250 markets, has identified 10 markets where the regional economies are healthy and have strong potential for increasing prosperity.
These housing markets have bucked the national trend in 2008 and avoided the subprime crisis, the consultancy says.
Whatever the future holds for the housing market as a whole, Housing Predictor forecasts that these cities will continue to see steady, dependable growth.
Top cities and the percentage sales prices have increased so far in 2008.
Biloxi, Miss., 4.9 percent
Salem, Ore., 4.7 percent
Bismarck, N.D., 4.6 percent
Spokane, Wash., 4.4 percent
Yakima, Wash., 4.1 percent
Austin, Texas, 4.0 percent
Grand Junction, Colo., 4.0 percent
Fargo, N.D., 4.0 percent
Mobile, Ala., 3.9 percent
Albuquerque, N.M., 3.5 percent
Source: Housing Predictor (11/15/08) From www.realtor.org
Completing a Mortgage Refinance can be a smart way to improve for your financial situation.
Depending on your circumstances you may want to undergo mortgage refinancing for any of the following reasons:
Mortgage Refinance To Lower Your Mortgage Rate & Payment
Even a small reduction in your mortgage rate can have a significant impact in the long-run. Refinancing to lower your monthly payment frees up cash flow, so you can utilize your money more effectively. Furthermore, if you plan to stay in your home for a long time, you may want to mortgage refinance and consider buying down your rate to reduce your monthly payment. If you have equity in your home, home loan refinancing could enable you to lower your mortgage payment significantly.
Mortgage Refinance To Consolidate Debt
If you have debt outside of your mortgage and you have equity in your home, it’s time to refinance your home loan. You are likely paying a much higher interest rate on credit cards and auto loans, and by mortgage refinancing you could roll all of these debts into one tax deductible loan. Credit card interest rates can be as high as 25%. Refinancing your home to pay off and consolidate debt under one low mortgage rate is a smart maneuver. A well structured home refinance could save you a great deal of money.
Mortgage Refinance To Get Cash Out Of Your Home
Completing a mortgage refinance can get you cash out of your home for a variety of purposes, including education expenses, vacations, other investments, home improvements and more. Mortgage refinancing is a much better option than using credit cards or personal loans.
Mortgage Refinance To Pay off Your Home Loan Faster
A mortgage refinance can be structured to pay off your home quicker. Instead of refinancing into a typical 30 year mortgage, you could get a 20, 15, or even 10 year fixed so you pay it off quicker. Also, many home refinance loans give you the option of paying more on your principal every month so you can pay down your home loan fast as well. Refinancing allows you to move into any type of mortgage loan.
Mortgage Refinance To Move To A Fixed Rate From An ARM
Adjustable Rate Mortgages (ARMs) are great when mortgage rates are low. However, as rates increase that ARM quickly becomes a significant burden. That’s when it is time to consider mortgage refinancing into a fixed rate loan. Especially if you plan on staying in your home for a few years, a refinancing your mortgage makes a great deal of sense. Refinancing into a stable fixed rate may give you peace of mind. More on fixed rate mortgages.
Mortgage Refinance To Eliminate Private Mortgage Insurance (PMI)
If you were unable to make a down payment of at least 20% when you first obtained your mortgage loan, you may be paying PMI. If your house has appreciated and/or you have paid down your existing mortgage, you may be able to mortgage refinance your home to eliminate your monthly PMI payment. Along with possibly lowering your rate, a mortgage refinance could reduce your monthly mortgage payment considerably
Mortgage Refinance To Lower Your Mortgage Rate & Payment
Even a small reduction in your mortgage rate can have a significant impact in the long-run. Refinancing to lower your monthly payment frees up cash flow, so you can utilize your money more effectively. Furthermore, if you plan to stay in your home for a long time, you may want to mortgage refinance and consider buying down your rate to reduce your monthly payment. If you have equity in your home, home loan refinancing could enable you to lower your mortgage payment significantly.
Mortgage Refinance To Consolidate Debt
If you have debt outside of your mortgage and you have equity in your home, it’s time to refinance your home loan. You are likely paying a much higher interest rate on credit cards and auto loans, and by mortgage refinancing you could roll all of these debts into one tax deductible loan. Credit card interest rates can be as high as 25%. Refinancing your home to pay off and consolidate debt under one low mortgage rate is a smart maneuver. A well structured home refinance could save you a great deal of money.
Mortgage Refinance To Get Cash Out Of Your Home
Completing a mortgage refinance can get you cash out of your home for a variety of purposes, including education expenses, vacations, other investments, home improvements and more. Mortgage refinancing is a much better option than using credit cards or personal loans.
Mortgage Refinance To Pay off Your Home Loan Faster
A mortgage refinance can be structured to pay off your home quicker. Instead of refinancing into a typical 30 year mortgage, you could get a 20, 15, or even 10 year fixed so you pay it off quicker. Also, many home refinance loans give you the option of paying more on your principal every month so you can pay down your home loan fast as well. Refinancing allows you to move into any type of mortgage loan.
Mortgage Refinance To Move To A Fixed Rate From An ARM
Adjustable Rate Mortgages (ARMs) are great when mortgage rates are low. However, as rates increase that ARM quickly becomes a significant burden. That’s when it is time to consider mortgage refinancing into a fixed rate loan. Especially if you plan on staying in your home for a few years, a refinancing your mortgage makes a great deal of sense. Refinancing into a stable fixed rate may give you peace of mind. More on fixed rate mortgages.
Mortgage Refinance To Eliminate Private Mortgage Insurance (PMI)
If you were unable to make a down payment of at least 20% when you first obtained your mortgage loan, you may be paying PMI. If your house has appreciated and/or you have paid down your existing mortgage, you may be able to mortgage refinance your home to eliminate your monthly PMI payment. Along with possibly lowering your rate, a mortgage refinance could reduce your monthly mortgage payment considerably
Reverse Mortgages in Mobile Alabama
A Reverse Mortgage is a home loan available to individuals aged 62 or older as a payout of home equity to the borrower. Reverse mortgage borrowers can receive a lump sum, monthly payments or hold the money in a savings account as a credit line.
In a normal "forward" mortgage you access your home’s equity through a loan and make monthly payments to a lender, but with a Reverse Mortgage you receive payments from the lender in return for a decrease in your home’s equity. Reverse Mortgages can help homeowners who are "house-rich" but "cash-poor" stay in their homes, remain independent and meet their financial obligations.Some benefits of a Reverse Mortgage are:
No monthly payment
No income or credit requirements
Funds can be used to supplement monthly income Reverse Mortgage loans do not have to be repaid until the death of the primary borrower(s), the home is sold or you permanently move out of the home.Reverse Mortgages are backed by the Federal Housing Administration (FHA) and are generally available up to 60% of your appraised value, depending on your age.
Counseling prior to the loan is required and available through a multitude of sources including AARP.Reverse Mortgages may be fixed or variable rates and can use up all or some of the equity in your home as the payout period progresses.
In a normal "forward" mortgage you access your home’s equity through a loan and make monthly payments to a lender, but with a Reverse Mortgage you receive payments from the lender in return for a decrease in your home’s equity. Reverse Mortgages can help homeowners who are "house-rich" but "cash-poor" stay in their homes, remain independent and meet their financial obligations.Some benefits of a Reverse Mortgage are:
No monthly payment
No income or credit requirements
Funds can be used to supplement monthly income Reverse Mortgage loans do not have to be repaid until the death of the primary borrower(s), the home is sold or you permanently move out of the home.Reverse Mortgages are backed by the Federal Housing Administration (FHA) and are generally available up to 60% of your appraised value, depending on your age.
Counseling prior to the loan is required and available through a multitude of sources including AARP.Reverse Mortgages may be fixed or variable rates and can use up all or some of the equity in your home as the payout period progresses.
VA home loans, Mortgage in Alabama
VA home loans are guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase, rate & term refinance or cash out refinance of a primary residence.Benefits of VA loans include:
Common sense underwriting guidelines (with respect to credit, debt to income ratios, etc.)
Little or no down payment
Competitive mortgage rates
No monthly mortgage insurance premium VA Home Loan Guaranty Services also provides counseling and assistance to veteran borrowers having financial difficulties or facing default.Even though a mortgage insurance premium is not required, borrowers are charged a small funding fee for VA mortgages, which guarantees the loan.
The fee may be paid in cash by the buyer or seller, or it may be financed and included in the loan amount.A VA mortgage can be used to buy a home, build or even improve a home with energy-saving features such as solar or heating & cooling systems, water heaters, insulation, weather- stripping & caulking, storm windows & doors or other energy efficient improvements approved by VA.
A satisfactory Certificate of Eligibility from VA must be presented to be eligible for the loan program.
Common sense underwriting guidelines (with respect to credit, debt to income ratios, etc.)
Little or no down payment
Competitive mortgage rates
No monthly mortgage insurance premium VA Home Loan Guaranty Services also provides counseling and assistance to veteran borrowers having financial difficulties or facing default.Even though a mortgage insurance premium is not required, borrowers are charged a small funding fee for VA mortgages, which guarantees the loan.
The fee may be paid in cash by the buyer or seller, or it may be financed and included in the loan amount.A VA mortgage can be used to buy a home, build or even improve a home with energy-saving features such as solar or heating & cooling systems, water heaters, insulation, weather- stripping & caulking, storm windows & doors or other energy efficient improvements approved by VA.
A satisfactory Certificate of Eligibility from VA must be presented to be eligible for the loan program.
FHA Mortgages-HOME LOANS in Alabama
FHA home loans are insured by the Federal Housing Administration. Although FHA mortgage rates may typically be higher than conventional loans, FHA mortgages offer many advantages.The Federal Housing Administration (FHA) has been helping borrowers realize the American dream of affordable homeownership since 1934. FHA financing advantages include:
Low Down Payment: as little as 3.5%
Flexible Credit Guidelines: generally easier to qualify than with conventional home financing
Competitive Mortgage Rates
Down Payment Assistance: the down payment for your FHA loan can come from a gift, and reserves are not an automatic requirement. FHA is one of the few remaining programs that will allow up to 95% cash out on a refinance and will lend in declining markets without an automatic reduction in loan-to- value**.
Financing options include traditional fixed rate products, adjustable rate mortgages and temporary interest rate buy-downs.
Best of all, your loan is insured by FHA which gives lenders greater flexibility with our lending guidelines.
*Appraisal must support mortgage loan-to-value.
Low Down Payment: as little as 3.5%
Flexible Credit Guidelines: generally easier to qualify than with conventional home financing
Competitive Mortgage Rates
Down Payment Assistance: the down payment for your FHA loan can come from a gift, and reserves are not an automatic requirement. FHA is one of the few remaining programs that will allow up to 95% cash out on a refinance and will lend in declining markets without an automatic reduction in loan-to- value**.
Financing options include traditional fixed rate products, adjustable rate mortgages and temporary interest rate buy-downs.
Best of all, your loan is insured by FHA which gives lenders greater flexibility with our lending guidelines.
*Appraisal must support mortgage loan-to-value.
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