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The Federal Housing Administration announced on March 6th 2012 that it would reduce mortgage insurance premiums for certain homeowners to refinance and take advantage of the lower market rates. Qualifications are:

  • FHA loans must be originated before June 1st 2009.
  • Homeowners must be current with only 1X 30 day late in the past 6 months and max of 2 late payments in the last 12 months.
  • No income, employment, credit score or appraisal required (so underwater homeowners can still refinance).
  • Up-front mortgage insurance premium is reduced to .01% of the loan balance (financed into the loan amount) and annual mortgage insurance is reduced to .55%.
  • Net tangible benefit of at least 5% savings in monthly principal, interest and mortgage insurance payments.

This new FHA program will be available starting June 11, 2012. Call me today get your refinancing started! A full mortgagee letter can be read here.

Posted by Sam Kader on March 12th, 2012 5:56 PM

Here are the highlights of the upcoming Home Affordable Refinance Program (HARP) 2 (program designed to help underwater homeowners to refinance):

  • The cap of 125% LTV has been removed.
  • Streamlined underwriting. No requirement for physical appraisals in many cases, speedy processing and the the elimination of fees imposed by Fannie Mae and Freddie Mac in recent years.
  • Only loans owned or guaranteed by FNMA or FHLMC are qualified.
  • Loans must be purchased or securitized on or before May 31, 2009. 
  • Can have 1 X late within the last 12 months but not in most recent 6 months.
  • May be used for primary, second home or investment property.
  • Maximum loan amount in King, Pierce, and Snohomish is $506,000 for 1 unit property and $618,300 for 2 unit property. In San Juan county - $483,000 for 1 unit property and $618,300 for 2 unit property.
  • Must have qualifiable income. Consult me if you are unemployed but cash rich.
  • Must be current on mortgage and all other bills as reported on credit report.

If neither FNMA nor FHLMC owns your mortgage, call the U.S. Department of Housing and Urban Development (HUD) at 800-569-4287 or visit HUD approved counseling agencies for FREE consultation.

Some pointers regarding HARP refinancing:

  • You do not have to reset the clock back to 30 years of mortgage payments. We can offer you a term ranging from 10 to 30 years for the new loan. Most homeowners opt for a 30 year term and this does entail a new 30 years of payments. However, with the lower interest rate and if you continued paying the original mortgage payment (extra amount) every month, less interest would be paid over time and the loan would be paid off faster than the original would have been.
  • You do not have to have sufficient cash up front to pay closing costs. We can evaluate if closing costs can be rolled into the new loan.


Posted by Sam Kader on March 4th, 2012 3:31 PM

Rates are at historic low. Thinking about refinancing? There are 2 types of refinancing;
a) Rate-and-Term refinancing and b) Cash-out refinancing. Here are 6 items that you should consider for refinancing: 

  1. Appraised Value. Consider a possibility that your house may worth less than what you think it's worth (not likely if you live in Seattle). Know how much you owe and what the Loan-to-Value is when the appraiser arrives
  2. Obtain conditional approval and lock the rate (30 day lock - cushion for any financing contingency).
  3. Do not start home improvements project prior to appraisal being completed.
  4. Consider shorterning the maturity from 30 year to either 15 or 20 year mortgage. Rates are still attractive. But, payments will go up.
  5. Credit score preferably at 720. Minimum requirement is 620. Check for Dispute Account which can snag the refinancing process.
  6. New rule starting this year - Do not open any new account until the financing process has been completed. Even soft inquiries need to be explained.
Is there such thing as no-closing costs refinancing? Yes and no. A mortgage isn't free. There are fees associated with getting the loan. Those closing costs usually total thousands of dollars. You can pay for it at closing or you can add them to the loan amount. As a result, you do not have to pay anything at closing or "no-closing" costs mortgages. The question whether you should pay or finance the closing costs depend on a few factors: 

1. Do you have funds to pay? If yes then consider question 2 below. 
2. Are you planning to move after 5 years? If yes then consider paying it at closing. 
3. Refinancing break-even calculator. In general, if you could recoup all closing costs in  less than 5 years - you should proceed with refinancing.

You can save your funds for home improvements or other investments. Let me know if I can assist you. 



Posted by Sam Kader on August 3rd, 2010 11:47 AM
The government intention to assist homeowners to refinance and to take advantage of historical low rates failed miserably. Out of 5 million projected homeowners, only 200,000 thus far took advantage (actually qualified) for it. The program that started in March last year is coming to an end in June 2010. The biggest obstacle preventing homeowners from taking advantage of it is existing private mortgage insurance (PMI) and existing second mortgage. PMI cannot be reissued to a new loan and second mortgage can refuse to re-subordinate because of property values.
Posted by Sam Kader on February 21st, 2010 9:41 AM



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