As we wrote about in recent months, the HARP refinance program has now been expanded to allow more homeowners the option to refinance and take advantage of historically low interest rates. The program is a government backed initiative to allow borrowers who could previously not refinance, due to lack of equity or being upside down in their homes, to now do so.

 HARP 2.0 is now set to officially become available to borrowers who have loans that are serviced by Fannie Mae and Freddie Mac, with no restrictions on value. In other words, the current appraised value of your home will not disqualify you from refinancing, regardless of value. 

In recent weeks we have covered some basic information about the program and last week we started by answering some common questions about the program. This week, we continue with some more questions and answers.

Question #1: Can I refinance more than one property with the HARP program, if I own multiple homes?

Answer: Yes, you can refinance multiple homes with the HARP program, if you own more than one home. As we covered last week, the HARP program is available for borrowers, regardless of whether they do live in a home or use it as a second home or own it as an investment home. However, it is worth noting that once you refinance once using the HARP program, you cannot refinance the same loan again through the HARP program.

Question #2: What types of loan programs will be available for the refinance of my home through HARP?

Answer: The loan options for the HARP refinance program will be limited to 30 year and 15 year fixed mortgages. With interest rates at all time levels however, it doesn’t make much sense than to lock into one of these two programs anyway, as there are not tremendous benefits to be had in the current marketplace in adjustable rate loans. Interest rates are low now and may be for a little bit still, but inevitably they will rise, when that happens, you want to be protected with a fixed rate.

Question #3: What if my loan is not owned by Fannie Mae or Freddie Mac, what options do I have then?

Answer: While it is not common, we have seen instances where a homeowner’s property has not shown up as a Fannie Mae or Freddie Mac owned loan online, but upon calling into your existing loan servicer, the loan has been verified as being owned by one of the two. So, if the loan does not show up as owned by either, a phone call to your existing loan servicer may be a good option to make sure it is owned by Fannie Mae or Freddie Mac.

            In addition, if your loan is perhaps an FHA or VA loan, there are also already existing streamline refinance options that may be available to you as well to lower your current interest rate and mortgage payments as well. So it is advisable to speak to a lender about those options as well.

            If you do not fall into any of these categories, then the options are limited, but work is being done now to see if another refinance program can be established for privately owned loans, through government assistance and as this information becomes available, we will of course provide this as well.

As always it makes sense to speak to a lender about current home loan options and it is always advisable to speak with a licensed mortgage lender, such as Strategic Mortgage. In future weeks, we will continue to provide additional updates on the HARP 2.0 program.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com 

As we wrote about in recent months, the HARP refinance program has now been expanded to allow more homeowners the option to refinance and take advantage of historically low interest rates. The program is a government backed initiative to allow borrowers who could previously not refinance, due to lack of equity or being upside down in their homes, to now do so.

 HARP 2.0 is now set to officially become available to borrowers who have loans that are serviced by Fannie Mae and Freddie Mac, with no restrictions on value. In other words, the current appraised value of your home will not disqualify you from refinancing, regardless of value. 

In recent weeks we have covered some basic information about the program, but now we will answer some common questions that have been raised to us, about the program.

Question #1: Does this HARP 2.0 program apply to only homeowners who currently live in homes as their primary residence?

Answer: No, the HARP 2.0 program is open to homeowners, regardless of whether the home is currently a primary residence, second home or investment property. The current occupancy of the home will not disqualify you from qualifying for the HARP 2.0 program.

Question #2: Do, I need to be on time on my current mortgage, in order to qualify for a refinance, using the HARP 2.0 program?

Answer: Yes, well at least technically. The standard guidelines for the refinance of your home through the program require that you have made your last 12 months mortgage payments on time. You can have had late payments on other payment accounts and still qualify, but you will need to be able to explain any missed payments.

Question #3: Do, I have to pay mortgage insurance with the new program, since my home has less than 20% equity.

Answer: No, you do not have to pay mortgage insurance with your new HARP 2.0 loan, even though you have less than 20% equity in your home. Normally, if you have less than 20% equity in your home and you take out a conventional refinance or purchase home loan, than you have to pay mortgage insurance, but that is waived through the HARP program. In this case, it also makes sense for borrowers who may not be upside down but owe a little more than 80% of the value of their home on their current loans to use the HARP program. In that, they too can also avoid mortgage insurance, even if they only have a little equity in their homes.

As always it makes sense to speak to a lender about current home loan options and it is always advisable to speak with a licensed mortgage lender, such as Strategic Mortgage. In future weeks, we will continue to provide additional updates on the HARP 2.0 program.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com 

 As we wrote about in recent months, the HARP refinance program has now been expanded to allow more homeowners the option to refinance and take advantage of historically low interest rates. The program is a government backed initiative to allow borrowers who could previously not refinance, due to lack of equity or being upside down in their homes, to now do so.

 HARP 2.0 is now set to officially become available to borrowers who have loans that are serviced by Fannie Mae and Freddie Mac, with no restrictions on value. In other words, the current appraised value of your home will not disqualify you from refinancing, regardless of value. 

 There are of course certain other guidelines that must be met to qualify for this refinance program. 

First, your home loan must owned by Fannie Mae or Freddie Mac and must have been acquired by Fannie Mae or Freddie Mac prior to June 1, 2009. Even though you may make payments to a loan servicer, if you have a conventional loan, then it is probably owned by Fannie Mae or Freddie Mac.

           To see if your loan is owned by Fannie Mae you can go directly to: http://www.fanniemae.com/loanlookup and input your property information. While to see if your home is owned by Freddie Mac, you must go to: https://ww3.freddiemac.com/corporate/ and enter personal and property information. 

            Now, if your home loan does fall into these guidelines, then you will be eligible to refinance into a current market interest rate, which still sit at historical low levels, generally without any out of pocket costs.

 For full qualification, of course it is always advisable to contact a licensed mortgage lender, such as Strategic Mortgage. 

In addition, in the coming weeks, we will provide additional information on the HARP 2.0 loan program.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com 

FHA mortgage loan limits saw a decrease as of October 1st, 2011, but now the Government has stepped in and reinstated the higher mortgage loan limits that we have seen in recent years.

In 2008, Congress temporarily increased the FHA loan limits to help alleviate the effects of the economic downturn. At that time Maricopa County here in Arizona saw the FHA loan limit raised to $346,250. This essentially meant that a buyer could finance a home up to $358,500, given the FHA's 3.5% minimum down payment.

Then, On October 1, 2011, the temporary loan limits expired and here in Arizona, in Maricopa and Pinal counties, loan limits were reduced down to $271,050. However, that will change once again as the higher loan limits have again been reinstated by the Government and the FHA loan limits will increase.

FHA loan limits in Maricopa and Pinal counties in Arizona are now once again at $346,250 through 2013, opening up loan availability for homeowners looking to finance dollar amounts over the previous loan limits. The FHA loan limits vary by county, so they will also change across the board for counties nationwide, with most increasing with this new initiative.

Conforming mortgages that are backed by Fannie Mae and Freddie Mac will remain at $417,000 nationwide with no changes slated to take place. However, if any additional changes to mortgage loan limits are announced, we will of course provide the updated information.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

 As we recently wrote about, the Fannie Mae HARP refinance program has now been expanded to allow more homeowners the option to refinance and take advantage of historically low interest rates. Starting December 1, 2011 the program will allow homeowners to refinance their existing home loans, up to 125% of their current home values. However, there will be an even bigger expansion of the program in 2012.

There are of course certain guidelines that must be met to qualify for this refinance program, as we have covered in recent articles. However, the most important of those being that your current home loan is owned by Fannie Mae, which can be looked up at: http://www.fanniemae.com/loanlookup. And in addition, your loan must have been sold to Fannie Mae prior to June 1, 2009.

            Now, if your home loan does fall into these guidelines, then come March 1, 2012 the program will lift the 125% cap on loan to value (size of your home, as opposed to the value of your home) and have not set loan to value limit. This means that essentially, no matter how upside down your home is. If you fit into Fannie Mae’s guidelines, they will let you refinance and take advantage of the very low interest rates in the current marketplace.

            Of course, we are a few months away from this loan program being available, but it does appear that this new program will be an option for even more homeowners, who have not been able to take advantage of other recent initiatives, due to being too upside in their homes.

For full qualification, of course it is always advisable to contact a licensed mortgage lender, such as Strategic Mortgage. As always, as guidelines and standards change we will provide additional information and updates.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

 As announced earlier this year, the Fannie Mae HARP refinance program has now been expanded to allow more homeowners the option to refinance and take advantage of historically low interest rates. The big recent news from the expansion is an expansion to help borrowers who are even more upside down in their homes refinance.

                        As mentioned previously, the program does have a few levels of criteria that homeowners must meet in order to qualify. First, it doesn’t matter who the homeowner currently make their payments to, but the loan must be owned by Fannie Mae. In order to check and see if your home loan is currently owned by Fannie Mae you can quickly go to: http://www.fanniemae.com/loanlookup/ and input your address for immediate results.

            Next, the loan must have been originated prior to June 1, 2009. The reasoning behind this is that in the past two plus year’s interest rates and have values have both dropped and so the program is aimed at homeowners who already have Fannie Mae loans, but haven’t been able to refinance to current market interest rates.

            Finally, the existing mortgage loan must not have mortgage insurance included with it. Or in other words, when the homeowner obtained the current loan, they took out a Fannie Mae loan that did not have any mortgage insurance monthly payment included with it. You can however have a second mortgage behind this Fannie Mae loan and still qualify for this program.

            If you meet those qualifications, then starting December 1, 2011, the program will allow you to refinance your home loan up to 125% of the value of your current home value, at current market interest rates. This is an expansion over the previous limitation of 105% of your home’s current market value.

Furthermore, when it comes to a valuation for your home currently, Fannie Mae will use an automated valuation of your home to establish a value. Meaning that most borrowers will not need to have an appraisal done. However, there also is an ability to complete a standard home appraisal if the automated value does not come in at an acceptable range.

            While this program is not going to be an option for everyone, for those homeowners who think they may fit the qualification terms for the program, this is a great opportunity to lock in your home loan rate at incredibly low interest rates.

For full qualification, of course it is always advisable to contact a licensed mortgage lender, such as Strategic Mortgage. As always, as guidelines and standards change we will provide additional information and updates.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

When it comes to obtaining a mortgage whether you are purchasing or refinancing, fixing your credit score before you apply for a mortgage could literally save more than $100,000 over the course of your loan.

For all mortgage transactions, you will need to have your credit score pulled for qualification purposes and the difference between a high and a low score can make a big difference in the long term and short term.

In short, a credit score is a computer-generated number that ideally objectively evaluates all of the information in your credit report. The most used credit score in the US is the FICO score. It is a number between 300 and 850 determined with a formula developed by the Fair Isaac Corporation.

The whole idea behind credit scores is that people with higher credit scores are thought to be less likely to default on their loans and therefore are offered lower interest rates and a wider variety of loans from lenders.

Each person actually has three different FICO credit scores as the three national credit bureaus (Experian, Equifax, and TransUnion) all use their own databases to determine your score. 

When it comes a national average, the median score is 723, but in the eyes of lenders, there really isn’t much difference between a 740 score and an 850. So, as a potential mortgage borrower, as long as you cross that 740 threshold, you are in an excellent position.

Of course many types of financing, will allow for much lower scores and still excellent interest rates, most conventional loan programs will now require a 740 fico score for the best interest rates.

The score is determined from your credit report. Some of the factors that go into that report are as follows:

Your payment history: have you been paying your bills on time?

The amount you owe: how much overall debt do you have?

The length of your credit history: how long have you been borrowing money?

New credit: Have you opened any new accounts lately?

Types of credit used: are you using credit in different ways? Car loans, house loans, student loans, etc.

A credit score isn’t everything. Other things considered on your loan application include your income, your employment history, the location of the property, and how much cash you are putting down. Still, lenders need some kind of standard, and the credit score is what they use, so it makes sense to have the best credit score possible. While it might not be an accurate assessment of how you will do with your loan, it will affect how much you pay for your loan.

For example, on a 30 year conventional loan for $300,000 dollars, someone with an upper level 760-850 FICO score will pay $1,556 per month on an APR of 4.698%. A borrower at the lower end with a 620-639 score will pay $1,854 on 6.287%. Add that up over the 30 year span of the loan, and you’ll get a difference of a whopping $107,208 dollars.

If you are planning on looking for a home or getting a mortgage, you should check your credit at least 90 days before you apply. This will give you ample time to clear your record and hopefully improve your score. Even if you aren’t going to be looking anytime soon, it makes sense to get your credit score checked now.

As a result of the FACT Act (Fair and Accurate Credit Transactions Act), each US citizen is allowed one free credit check from the three main credit agencies per year. The site http://annualcreditreport.com is the only one authorized under federal law to do this for you. The report will give you a chance to make sure that your information is correct and it will let you see any red flags on your accounts. If anything is incorrect, you can ask in writing that the information be corrected or removed from your report. The different bureaus are required by law to investigate your complaint within thirty days.

Remember, your credit report is not the same thing as your FICO score, you can pay to have this number as well or have a mortgage professional obtain it with your permission, but more than anything it is important to know what is on your report.

Once you have looked at your credit score and fixed what you can, move forward by paying your bills on time, keeping account balances low (below 50% of their limits), and only taking out new credit when you need it. Also when you pay off your credit card balances, don’t close unused accounts, and don’t open new accounts.

In the end, your credit score plays a large part in how much you pay for your mortgage. The bottom line is that even though your credit score seems like something you have no control over, there’s actually a lot that you can do to improve it. And the time it takes to fix things is minimal compared to the potential savings over the span of your loan.

For more information on  current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Buying your first home is perhaps the biggest financial decision you will ever make in your life. At the end of the day, everyone’s situation is unique, but when it comes down to evaluating if you are ready to purchase your first home, it is important to ask yourself a few important questions before moving ahead and exploring home ownership.

In our most recent article, we tackled the question of, is now the right time to purchase a home? This week we look at the next important question when it comes to purchasing your first home and that is, can I qualify or afford the purchase of my first home?

When it comes to figure out how much you can afford, for the purchase of your first home, sales price is only a part of the equation. If you understand and know your credit score, how much cash you have for down payment and factor in costs for things like property taxes, insurance, and regular maintenance, you’ll have a true understanding of what you can afford.

First off all, when it comes to credit scores, different financing programs will look for different numbers, but in general you want to make sure that your credit score is a 620 or higher and have a pretty clean payment history in the last 12 months. However, in today’s market place, to receive the best interest rates it may be beneficial to even have a higher credit score than this. It is always in your best interest to sit down with a licensed and knowledgeable mortgage professional and have them pull your credit report ahead of time and evaluate if your credit score is where it needs to be. Then you can decide if there is anything you can do in the short term to raise your credit score even further to obtain the best possible interest rate.

Next, in today’s marketplace there are still many low down payment options including 0% for a Veterans Administration or USDA Home Loan. Or 3.5% for a Federal Housing Administration Loan. Or 5% for a conventional loan. Depending on your credit and financial situation, one financing option may make sense more than the other, but you want to make sure you have the down payment that is needed for financing ahead of pursuing your first home purchase. Again a trusted mortgage professional can help evaluate and qualify you for the right home loan program so that you know what to expect.

Finally, it is also important to factor in the whole equation and that will also include things like property taxes, homeowners insurance and homeowners’ association dues. These will also be part of your monthly expenses and factoring them into your monthly payments will definitely affect how much you can and want to pay monthly for your first home.

As always and mentioned above, when you decide that it is time to purchase your first home, your first step should be to make sure your credit and finances are in order. This will allow you to know how much you can qualify for, what you need to do if anything to fix your credit and how much down payment you will need.

For more information on  current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Buying your first home is perhaps the biggest financial decision you will ever make in your life. At the end of the day, everyone’s situation is unique, but when it comes down to evaluating if you are ready to purchase your first home, it is important to ask yourself a few important questions before moving ahead and exploring home ownership.

 We will first tackle the question that is on many potential homeowners’ minds right now and that is, is now the right time to purchase a home?

While recent history shows a decline in real estate prices, the bottom line still remains that if you are planning to purchase a home to live in, we may soon look back at the present day as one of the best times to do so. While housing prices may not skyrocket anytime soon, there are a couple of factors that make now such an opportune time to purchase a home.

First of all, mortgage interest rates are at historical lows which means that if you a purchase a home in the current market you can lock into an interest rate that you may never have to worry about refinancing for a lower rate down the road. Even more important, this provides you a less expensive payment right now. As we have detailed in a recent article, for a large part of the United States and specifically locally here in the Phoenix area, statistics show that owning a home really is less expensive than renting in a lot of cases.

In addition, on the topic of affordability, we are also still currently at the bottom of the recent housing downturn, which provides for home prices that are dramatically lower than in recent years. While it is anyone’s guess as to when home prices will eventually move upward, the market seems to have at least initially begun to level, which is good news for anyone looking to buy now.

Finally, when it comes to actually picking out your first home, there is still a large amount of inventory in the marketplace (which of course is one of the reasons we still have not seen an upswing in prices) which provides buyers with a large amount of choices to choose the perfect first home for themselves.

Therefore, while no one knows exactly where housing is going next, there are many factors which make now an opportune time for someone looking to buy and live in a home themselves for the next few years.

Stay tuned for our next article, when we tackle the next major question when it comes to buying your first home; can I afford or qualify to purchase my first home?

For more information on  current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

When it comes to credit scores, many consumers don’t know what to believe or what goes into calculating ones score. And that’s for good reason, as credit scores are derived from complex algorithms, too complex for even the most astute financial person to fully comprehend. However, there are certain myths and realities when it comes to credit scores.

Myth: Your Current Interest Rates Affect Your Credit Score

Reality: Credit bureaus don't look at your interest rates when calculating your credit score.  In fact, this myth has the process absolutely reversed: banks and credit card issuers will look at your credit score before determining your rates.  It's true that your previous credit history can affect your rates, but issuers look at your reported payment history, not your interest rates.  Credit bureaus don't even collect this information.

Myth: If You're Employed, That Reflects Well On Your Credit Score

Reality: Credit bureaus don't track your employment status, though previous and current employers could show up on your report. All they care about is your payment history and how much credit you've been extended in the past.  In fact, it's impossible to track everyone's employment history, and may be illegal, depending on the state.  It is true that bank loans will look at your current employment, but that's a different area entirely.

Myth: Your Age, Race, Gender, Nationality, and Ability To Speak English Will Affect Your Credit Score

Reality: Credit bureaus aren't interested in collecting this information, as it's irrelevant to what a credit score and credit report are supposed to do.  Furthermore, collecting this information can be illegal, and providing it to others is against federal discrimination laws.  While interested companies could probably learn this information about you and your age and gender may appear on your credit report in certain instances, it will not affect your credit score necessarily.

Myth: Credit Bureaus Look At Your Assets

Reality: Credit bureaus have no access to that information.  Credit bureaus don't receive any information from banks about your checking or savings accounts: only loans.  Similarly, credit card companies only report your credit line and how much you currently owe to the company. 

Myth: Where You Live Affects Your Score

Reality: Credit bureaus do track addresses, but this is solely to be able to properly line up the correct credit history to the correct person.  They don't provide that information on credit reports.

            In the end, when it comes to credit scores, there are still many complex factors, which make it difficult to explain all the ins and out of the scoring systems. However, there are certain myths and realities that we do know.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com