Is now a good time to refinance my mortgage?

Today mortgage rates are at 50 year lows.  With that said, there is no easy rule to determine if a mortgage holder should refinance to a lower rate or stay with their current loan.  There are a number of factors to consider:

The key question to ask yourself is how long do you plan on living in your current home?  If the answer is 3 years or less, you may not cover the closing costs incurred with a refinance.  However, I have a program available with no closing costs but you must qualify for this program.  Call me to see if you qualify.

If you refinance your current loan, will you realize at least a 1% savings?  If your loan amount is less than $100,000, then a 1% savings won’t make as big a difference as if the loan amount is $300,000. The monthly savings would be much higher.

Is your current loan an FHA or VA loan?  These loans can be assumed by a qualified buyer so if you have a lower rate it may help you sell your property faster if the current market rate is higher.

I recommend to my clients to lower their term whenever possible instead of starting the clock over with a 30 year mortgage.  In some cases, they can have a similar monthly payment and lower the term by 10 or 15 years.

FHA Streamline Refinance

FHA has permitted streamline refinances on insured mortgages since the early 1980’s. The “streamline” refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction.

The FHA Streamline Refinance is designed to lower the interest rate on a current FHA mortgage or convert a current FHA adjustable rate mortgage into a fixed rate. A Streamline FHA Refinance Loan can be performed quickly and easily. FHA Streamline fixed mortgages require much less hassle and paperwork than a normal refinance including no appraisal, no qualifying debt ratios and no income verification.  I have a program with no closing costs on an FHA streamline refinance.

What is the FHA Streamline Refinance?
The FHA Streamline Rrefinance has been around since since the 1980s. A Streamline Refinance is the much like a normal rate/term refinance, but with reduced paperwork. It does not eliminate the fees or costs associated with refinancing, however, some fees and costs may be reduced because of the reduced paperwork and requirements that must be met.

What are the basic requirements for an FHA Streamline Refinance?

The mortgage to be refinanced must already be FHA insured.

The mortgage to be refinanced should be current (not delinquent).

The refinance is to result in a lowering of the borrower’s monthly principal and interest payments (5% reduction is necessary)

No cash may be taken out on mortgages refinanced using the streamline refinance process.

How much can I refinance?
The maximum amount for an Streamline FHA loan is determined by
1.  Maximum Loan Amount
The maximum loan amount allowed for FHA Refinance Mortgages varies from county to county. The highest maximum FHA mortgage right now is $729,750. The lowest maximum amount available in any county is $271,050. To see what the limit is in the county in which you’re interested, visit the following site https://entp.hud.gov/idapp/html/hicostlook.cfm. This site lists U.S. territories as well as states.

Maximum financing: Depending on the state where the property is located, the maximum FHA financing for an FHA Streamline Refinance (No Cash-Out) will be 97.75% of either the appraised value of the home with a new appraisal or the previous loan amount.

I have a software program which will give you the information necessary to make the decision to refinance or stay with your current loan.  Call Your Denver Mortgage Guy today at 720-435-4022  for a no cost analysis of your situation.