Strategic Mortgage - Bill Kamboukos

If You Have An Adjustable Rate Mortgage Still - It May Be Time To Act

Bill Kamboukos (Strategic Mortgage) — Fri, 17 May 2013 14:32:12 -0700

What To Do If You Have An ARM Mortgage

Right now there are mortgage borrowers with adjustable rate mortgages (ARMs) on which the rate has adjusted within recent years are currently enjoying extremely low interest rates.

This is a reflection of the unusually low levels of the rate indexes used by most ARMs. But of course the flip side of the equation is that adjustable rate loans are just that, adjustable and with interest rates expected to rise, the question for many borrowers is how long to stay in arm loan in the current market.

The first thing to understand is that ARM loans are based on indexes, such as the one year Treasury for instance plus a certain percentage called a margin. Right now, with that index being below 1% and many borrowers margin between 2% and 3%, the interest rates that borrowers with ARM loans are paying are still below that of regular fixed rate loans in the marketplace.

However, over time, history tells us that the US Treasury and other Indexes will not remain low and interest rates in general will move higher. The process will of course occur over a period of time, which creates an opportunity for ARM borrowers to wait until the rate-increase process starts before making a move. That is easier said than done because history also tells us that the market can move very fast.

In the end it perhaps comes down to each borrower evaluating their circumstance and deciding what fits best for them. However, as we have touched on in recent weeks, interest rates may finally be preparing for a run up from their historically low levels and now may be the time to finally refinance into a fixed rate.

If you are moving soon, refinancing will not benefit much

Borrowers with ARM mortgages, who plan to sell their home within the next year and a half, have little to gain. Of course, these borrowers have a lot to lose if rates move higher before they buy their next house, but refinancing their current mortgage will not help with that problem. Moving sooner though could be a benefit.

If You Can Not Afford To Pay More Should Refinance Now

Homeowners, who anticipate that they could not afford the payment if their ARM rate increased up to the maximum over several years, should consider refinancing into a fixed rate mortgage right away. The savings from the low ARM rate may not justify the risk of getting caught by a rate increase that results in the loss of their home.

Homeowners Unable or Unwilling to Monitor the Market Should Refinance Now

Homeowners who don't know how to monitor the market or don't want to invest the time required to learn how and when to do it, should refinance now.

Otherwise, they are very likely to be caught by a rate increase.

Borrowers, who just hope that the interest rate will below the next time their interest rate adjusts, fall into this category. The rate on most ARMs adjusts annually after the initial rate period ends, which means that the ARM rate can lag the market by up to 11 months. ARMs that adjust the rate monthly use rate indexes that are themselves lagged indicators as well.

Borrowers Who Monitor The Market Can Wait and See

These homeowners who are prepared to monitor the market and can take the risk of being caught with a higher interest rate can wait a bit. To minimize risk, you should still put in place a point to where you will not let the index tied to your loan to go above still even if you are watching the market otherwise it may hurt you in the long term,.

Borrowers who monitor the market should also be alert to refinance. You can't refinance in a day, or even a week, but you can minimize the time required by developing your refinance strategy beforehand. This means selecting one or several loan providers who you will contact as soon as you have decided to refinance.

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

HARP Refinance Program: Q&A For Program Extension

Bill Kamboukos (Strategic Mortgage) — Mon, 15 Apr 2013 10:31:56 -0700

As we recently covered, the HARP refinance program has been extended from an end date of December 31, 2013 to a new end date of December 31, 2015. This means that homeowners who are looking to use this program to refinance an existing Fannie Mae or Freddie Mac backed mortgage, have an additional two years to refinance their current loans. The program has proven to be an effective program for homeowners who are either upside down on their homes or who just have less than 20% equity in their homes, to refinance to a new fixed rate mortgage.

When the program extension was announced, the FHFA, which oversees Fannie Mae and Freddie Mac, also released a Question and Answer list of commonly asked questions for the program as well and that information is listed below:

Frequently Asked Questions
Home Affordable Refinance Program (HARP) Extended to 2015

Overview of the Home Affordable Refinance Program (HARP)
The Federal Housing Finance Agency (FHFA) and the U.S. Department of the Treasury introduced the Home Affordable Refinance Program (HARP) in early 2009 as part of the Making Home Affordable program. HARP provides borrowers, who may not otherwise qualify for a refinance because of declining home values or reduced access to mortgage insurance, the ability to refinance their mortgage into a lower interest rate and/or more stable mortgage product.

Why is FHFA extending the deadline?
FHFA determined that extending the program now will provide borrowers additional opportunities to refinance, give clear guidance to lenders, and reduce losses for Fannie Mae, Freddie Mac and taxpayers.

How many homeowners have been helped by HARP since its inception?
As of January 2013, more than 2.2 million borrowers refinanced through HARP since its inception in April 2009.

How many additional homeowners does FHFA estimate will be able to participate in HARP?
HARP has been successful thus far, with nearly 2.2 million borrowers participating in the program, and FHFA will soon be implementing a nationwide public relations campaign to educate consumers about HARP. The goal of this campaign is to reach as many eligible borrowers as possible and inform them of the value of refinancing under HARP and to motivate them to explore their options and utilize HARP before the program expires. So while we can’t provide hard estimates, we are hopeful that a substantial number of eligible borrowers will participate in the program going forward.

Are there any other changes to HARP?
Aside from extending the deadline, FHFA is not announcing any substantive changes to HARP or its eligibility criteria today.

Are borrowers whose loans are not owned or guaranteed by Freddie Mac or Fannie Mae eligible?
Neither FHFA nor Fannie Mae or Freddie Mac has the legal authority to extend HARP to borrowers whose mortgages are not owned or guaranteed by Fannie Mae or Freddie Mac.

Is there a maximum loan-to-value (LTV) ratio for HARP?
There is no maximum LTV limit for borrower eligibility. If the borrower refinances under HARP and their new loan is a fixed rate mortgage, there is no maximum LTV. If the borrower refinances and their new loan is an adjustable rate mortgage, their LTV may not be above 105 percent.

Is HARP the only refinance program available to borrowers?
HARP is only one of several refinancing options available to homeowners and is unique in that it is the only refinance program that enables borrowers with little to no equity in their homes to take advantage of low interest rates and other refinancing benefits.

How can I tell whether companies promising to help borrowers get HARP loans are legitimate?
Borrowers do not need to use third-party companies that advertise themselves as “mortgage experts” or “foreclosure specialists” to apply for a HARP loan. Before calling such companies borrowers should talk first with their mortgage lender.

Are mortgages on condominiums and investment properties eligible for refinance under HARP?
Yes.

What do borrowers need to do to take advantage of HARP?
The first step for the borrower is to learn if his or her mortgage is owned or guaranteed by Freddie Mac or Fannie Mae. The next step is to contact the borrower’s existing lender or participating lenders offering HARP refinances. Check here to see if your loan is owned by Fannie Mae or Freddie Mac.

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

HARP Refinance Program – extended until 2015

Bill Kamboukos (Strategic Mortgage) — Mon, 15 Apr 2013 10:05:58 -0700

As we have discussed over the past few years, the HARP refinance program is a rare Government sponsored program, in that it actually has helped many homeowners in refinancing their homes. For those who are upside down in their homes, it has allowed them to refinance into a new conventional loan without an appraisal in most cases and even for those with some equity in their homes, it can be an option as well (as we covered in a recent article).

The program was set to expire on December 31, 2013. However, on April 12, 2013, an announcement was made by the FHFA, which oversees Fannie Mae and Freddie Mac, that the program would be extended until December 31, 2015. Although many homeowners have already taken advantage of the program, we believe that extending the program is a positive for the housing market. It will allow additional homeowners to have this program as an option, without inflating the budgets of these agencies, as this program is merely aimed at allowing homeowners who already have a Fannie Mae or Freddie Mac loan, to refinance into a new, lower rate loan.

Below is some information specifically from the HARP program press release, upon the extension of the program.

“More than 2 million homeowners have refinanced through HARP, proving it a useful tool for reducing risk,” said FHFA Acting Director Edward J. DeMarco. “We are extending the program so more underwater borrowers can benefit from lower interest rates.”

To be eligible for a HARP refinance homeowners must meet the following criteria:

-The loan must be owned or guaranteed by Fannie Mae or Freddie Mac.

-The mortgage must have been sold to Fannie Mae or Freddie Mac on or before
May 31, 2009.

-The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.

-The current loan-to-value (LTV) ratio must be greater than 80 percent.

-The borrower must be current on their mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months.

-Borrowers should contact their existing lender or any other mortgage lender offering HARP refinances. Check here to see if your loan is owned by Fannie Mae or Freddie Mac.

-Fannie Mae and Freddie Mac have helped approximately 2.2 million borrowers refinance their homes since HARP was introduced by FHFA and the U.S. Department of the Treasury in April 2009.

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

HARP Refinances - For Homeowners Who Equity In Their Homes

Bill Kamboukos (Strategic Mortgage) — Tue, 26 Mar 2013 15:27:24 -0700

The HARP refinance program a is a great option for homeowners who are upside down to refinance and take advantage of today's historically low interest rates. However, for homeowners who are not upside down on their homes, the HARP program also can offer benefits as well, that a conventional home loan refinance may not.

Benefit #1- Appraisal Waivers: Traditionally, when refinancing a conventional loan, you needed to have an appraisal done on your home. In today's market, this is an added expense and hassle in the refinance process and often times the numbers on appraisals are very conservative. Even if you have equity in your home, a HARP refinance can allow you to refinance and potentially receive an appraisal waiver, lowering the total cost to refinance and providing a quicker and easier process.

Benefit #2 - No Mortgage Insurance: On a conventional home loan refinance, if you owe more than 80% of the value of your home on a first mortgage, then you have to obtain mortgage insurance on your home loan. For many homeowners who at one point, put 20% down to purchase a home and have now seen home values drop, they can no longer refinance without having to contend with mortgage insurance. With the HARP refinance program, that is no longer the case. If you over 80% of the value of your home, you do not need to obtain mortgage insurance and so you can lower your interest rate without having to add costly mortgage insurance to your loan.

These are two major benefits to think about refinancing through the HARP program, even if you are not upside down in your home. The program may be a tool to reduce your upfront costs (appraisal) and long term costs (mortgage insurance). Of course to qualify for a HARP refinance your home loan must be currently owned by Fanni Mae or Freddie Mac (owned, not serviced) and must have been taken out prior to June 1, 2009.

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

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

Mortgage Debt Forgiveness Act - Extended Through 2013

Bill Kamboukos (Strategic Mortgage) — Tue, 26 Mar 2013 15:25:48 -0700

Good news for those who are contemplating or completing a short sale, the Mortgage Debt Forgiveness Act has been extended through 2013.

If you had mortgage debt forgiven this past year, whether it was through a short sale or perhaps mortgage modification then you may be able to claim special tax relief and exclude the debt forgiven from your income.

That is because the Mortgage Debt Forgiveness Debt Relief Act of 2007 allows for owners of primary residences to avoid paying taxes on this forgiveness under certain circumstances. Here are 10 facts directly from the IRS in regard Mortgage Debt Forgiveness.

This act was set to expire at the end of 2012. However, as mentioned, the forgiveness act has been extended through December 31, 2013.

1) Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.

2) The limit is $1 million for a married person filing a separate return.

3) You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

4) To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.

5) Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.

6) Proceeds of refinanced debt used for other purposes -- for example, to pay off credit card debt -- do not qualify for the exclusion.

7) If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.

8) Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions -- such as insolvency -- may be applicable. IRS Form 982 provides more details about these provisions.

9) If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

10) Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, please visit http://www. IRS.gov and as always consult a tax professional with specific questions you may have.

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

Your Credit Score: Facts and Fiction

Bill Kamboukos (Strategic Mortgage) — Tue, 26 Mar 2013 14:30:26 -0700

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 facts and fiction when it comes to credit scores.

Fiction: Your Current Interest Rates Affect Your Credit Score

Fact: 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.

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

Fact: 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.

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

Fact: 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.

Fiction: Credit Bureaus Look At Your Assets

Fact: 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.

Fact: 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 facts and fiction 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

USDA Home Loans – Streamline Refinances Available

Bill Kamboukos (Strategic Mortgage) — Tue, 12 Feb 2013 13:58:45 -0800

The USDA home loan program is a loan program that often times get losts in the shuffle when being discussed about home loan options for potential and current homeowners. The program is used considerably less often then Conventional, FHA or VA loan programs and the reason that mainly is, is due to the restrictions the program places on potential homeowners.

First of all, the big caveat for the program is that in order to use the loan program to purchase a home, you must be in a USDA designated rural area. However, as is the case here in the Phoenix metropolitan area, often times these rural areas are actually in areas that are very close in proximity to other very urban or suburban areas. These include areas like Goodyear, Queen Creek, Waddell, Buckeye and Maricopa, Arizona just to name a few.

Now, in recent years, as streamline refinance programs have become very popular for loans such as the FHA or VA loan, USDA loans have been vastly ignored. However, USDA loans themselves also offer streamline refinance programs that allow homeowners with existing USDA loans to obtain a lower interest rates with less documentation, without an appraisal and with limited fees, based on credit approval (currently a 640 minimum credit score is required for the USDA streamline refinance program).

So, if you are a homeowner with a USDA home loan at or above 4%, then it may make sense to look into a USDA streamline refinance, before interest rates move higher. This may give you an opportunity to take advantage of a program that is designed to essentially streamline the process of lowering your current interest rate and payment.

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

FHA Home Loans - Fees Increase Again April 1st

Bill Kamboukos (Strategic Mortgage) — Tue, 12 Feb 2013 13:56:06 -0800

FHA Home loans will have new changes going into effect on April 1, 2013. Recently, HUD, which oversees the FHA announced their latest budget numbers and announced a slew of new methods they will use to try make the agency's finances more balanced.

Specifically, here are the two most important parts of their announcements for someone considering get an FHA loan after April 1st.

1) FHA Mortgage Insurance annual premiums (MIP) will be moving from 1.25% to 1.35% for borrowers who make a 5% or less down payment. They will also increase from 1.20% to 1.30% for borrowers who make a greater than 5% down payment. 1)

2) The policy of a homeowner being able to cancel the MIP on their FHA loan after 5 years, if they are at 78% of the value of their home will be eliminated for those who take out a 30 year loan and put down less than a 10% down payment. 2)

That means that in the past three years as the Government has crafted programs to push down home loan interest rates, the FHA has raised the annual cost of their mortgage insurance from $91.67 per month to $225 per month on a $200,000 loan. That's quite a jump and unfortunately, as we had warned in past articles, it doesn't seem as there is an end in sight.

In addition, the new policy to never allow for the cancellation of this mortgage insurance will also hurt new homeowners who decide to keep FHA loans for the long term, but dont have the ability to take a 15 year loan out initially or can't afford a greater than 10% down payment. As they will never be able to eliminate the mortgage insurance associated with it.

In fact, those who have an existing FHA loan, also may be further deterred from refinancing into a new FHA loan, knowing that they will never be able eliminate the mortgage insurance associated with it.

In the end, this may not be the last changes we see with FHA loans, but it is yet again in our opinion a negative for the FHA loan going forward. However, with mortgage loan rates at all time lows and FHA loans still only requiring a 3.5% down payment, FHA loans still provide a very attractive option for buyers with a lower down payment requirement.

Conventional Loans with low down payments – an FHA alternative

Bill Kamboukos (Strategic Mortgage) — Thu, 17 Jan 2013 12:20:03 -0800

As we have documented over the past few years, as interest rates on mortgage loans have declined and stayed near record lows, FHA mortgages have actually gotten more expensive. For that reason, many new homebuyers are turning to 5% down payment Conventional mortgages instead of FHA mortgage.

As we have discussed, mortgage insurance for FHA loans has continued to increase, to the point where it is now, which is 1.75% in upfront mortgage insurance and 1.25% on a monthly basis. For a more detailed explanation of how these costs can affect the average homeowner, please see last week’s article for a breakdown of how expensive these costs could be.

One of the reasons that FHA loans have been so popular is that they offer some of the lowest down payments available to all home buyers, currently at 3.5%. However, Conventional loans with a 5% down payment are now becoming the home loan product of choice for many new home buyers as they offer a significant monthly savings in payments.

Now, of course there is a 1.5% greater down payment requirement for a conventional loan as opposed to an FHA loan. In addition, credit scores must generally be a little higher for Conventional loans than on FHA mortgages. However, for those who can afford the slightly higher down payment, a significant savings can be achieved initially and over the life of the loan.

First of all, with a 5% down payment, you avoid the 1.75% upfront mortgage insurance, which equates to about $3,500 on $200,000 loan. And while the actual mortgage insurance will vary and is not standardized like on FHA mortgages. It is often less than half of what mortgage insurance costs on a monthly basis for FHA mortgages. Which can save many homeowners $100 a month or more.

As always, it makes sense to contact a qualified and licensed lender, such as Strategic Mortgage, and fully exploring all of your options before committing to a new home loan. And it makes sense to see where the numbers fall on all of your financing options before choosing a loan program. However, for many homeowners, Conventional mortgages do make sense in an environment with rising FHA mortgage costs.

FHA Loans – Becoming Too Expensive For Many Homeowners

Bill Kamboukos (Strategic Mortgage) — Thu, 17 Jan 2013 12:17:21 -0800

In recent years we have documented that while interest rates on mortgage loans have declined and stayed near record lows, FHA mortgages have actually gotten more expensive.

The main culprit of this is FHA mortgage insurance and it’s not an accident. The new commissioner of the FHA, Carol Galante recently outlined more changes on the way to FHA loans that will aim at reducing FHA’s market share of the mortgage market.

Right now, FHA loans have a 1.75% fee in upfront mortgage insurance and 1.25% fee on a monthly basis for mortgage insurance. What that means, is that in additional to your principal and interest payment and your taxes and insurance payment on a monthly basis, a person with a $200,000 FHA mortgage would also pay $208.33 per month in mortgage insurance a $3,500 upfront mortgage insurance premium.

Yet, these numbers will actually most likely get worse, sooner rather than later, as we are expected to see even more increases in monthly mortgage insurance costs for FHA mortgages this coming year. Couple that, with an expected increase in interest rates at some point in the near future (we know they can’t stay as low as they have been forever) and you have a loan program that will soon not be a very attractive option for many new homeowners.

Unfortunately, it appears that HUD and the FHA actually want this to be the case and as I mentioned, reduce their market share. This is unfortunate, as the program has always been a loan for first time homebuyers and those with lower incomes.

However, in our follow up article to this, we will discuss some of the options in the marketplace available for those who want to perhaps look outside of FHA mortgages, but keep similar down payment standards.

As always, it makes sense to contact a qualified and licensed lender, such as Strategic Mortgage, and fully exploring all of your options before committing to a new home loan.

HARP 2.0 Refinance Program – Still Available For Underwater Homeowners

Bill Kamboukos (Strategic Mortgage) — Thu, 20 Dec 2012 11:55:35 -0800

As we have written about in the past, the HARP refinance program is one of the only government initiated programs that has actually worked for many homeowners to refinance their mortgages, if they owe more than their homes are worth.

HARP 2.0, which came out last year, expanded the program 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 allows homeowners who have loans that are serviced by Fannie Mae and Freddie Mac, to refinance, 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.

Next, you will still have to prove your income and your credit will be reviewed, but this program does provide an option for homeowners without equity to refinance to our current market interest rates without any costs out of pocket.

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

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

Purchase Loans For Recently Flipped Properties – Still Available

Bill Kamboukos (Strategic Mortgage) — Thu, 20 Dec 2012 11:54:36 -0800

More and more in today’s market place we are seeing homes that were recently purchased by an investor, fixed up a little bit and put right back on to the market for re-sale. These homes are considered to be “flipped” properties and there have been various lending rules in recent years when it comes to someone getting a home loan to purchase one of these homes.

A “flipped” property is a home purchased by one buyer and then turned around and resold within 90 days by that buyer to a new buyer. Flipped property sales have continued to increase, especially here in Arizona, as many investors have purchased properties, often at auction, fixed the properties right away and resold them.

Many times, these are homes that are sold at fair market prices and represent good opportunities for buyers, as someone has put the money in to fix up and clean up homes that might otherwise need some work. It represents a transaction that can be advantageous to buyer and seller and work as a tool to aid in our housing recovery.

Given this fact, in recent months, the rules on obtaining home loans for financed properties have become more lenient. For someone obtaining a conventional loan on a flipped property, if the sale the of the home is less than 20% more than the seller bought the home form, then nothing additional is needed. If the property is sold for more than 20% more than the seller is re-selling the home for then improvements to the home just need to be documented in the property appraisal.

On the other hand, if a buyer is using FHA financing to purchase a home that has been flipped, a greater than 20% increase in property sales price, within 90 days, will need the following. The buyer will need to get 2 appraisals completed on the property (showing home improvements again as well) and will need to obtain a property inspection on the home as well.

This is good news for the housing market and many flip transactions are now being closed for buyers purchasing these homes. As always as guidelines and standards change we will provide additional information and updates.

Waiting Periods Required To Purchase A New Home: After Foreclosure or Short Sale

Bill Kamboukos (Strategic Mortgage) — Thu, 20 Dec 2012 11:53:42 -0800

One question that we seem to be asked more and more is in regard to the waiting period that one must wait after foreclosure or short sale to purchase a new home. And the answer is, “it depends.” In reality there are a lot of factors that go into qualifying for a new home loan, whether it be to purchase or refinance a home. After one of these events, the waiting period will vary depending on whether you had a short sale or foreclosure, what the circumstances were surrounding it and what type of new loan you are wanting to obtain.

In general, if you are looking for a new conventional loan you will have to wait a minimum of two years after a short sale, with extenuating circumstances and a minimum of three years after a foreclosure to get a new home loan. However, based on data from recent clients, it appears that three years is really a more likely scenario for loan approval than two years. That is because even after the waiting period you will have to still get a Fannie Mae DU approval for your new loan and that system appears to favor approvals much more after three years as opposed to two. In addition, down payments required will vary up until you reach a full seven years past a foreclosure.

For FHA loans and VA loans the waiting periods are a bit more straight forward. FHA loans generally require a three year waiting period, while VA loans generally require a two year waiting period, regardless of foreclosure or short sale.

As always, it is best to speak directly with a licensed mortgage professional, such as Strategic Mortgage, to discuss your complete scenario to see which options are best for you and to see if you are qualified to obtain a new home 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

Home Mortgage Rates In 2013 - Forecasts

Bill Kamboukos (Strategic Mortgage) — Thu, 20 Dec 2012 11:51:29 -0800

As we move into the 2013 year in the mortgage and real estate markets, it has already been noted, that 2013 has the making of what appears to be the second positive year in a row in the housing market. In that regard, housing inventories are expected to continue to slowly diminish and housing prices are expected to continue a moderate move upward. Both of which are good things for the housing market in the short and long term.

However, the other side of the coin in regard to the housing and mortgage market, is home loan interest rates. Interest rates currently still sit near all time lows and the Federal Reserve has been a major catalyst in pushing interest rates lower and attempting to keep them there for the immediate future. With that said, previously the Federal Reserve had stated that there goal was to keep interest rates low through 2015, but in their most recent policy statement they eliminated that statement and instead said that they will keep rates low until we essentially reach 6.5% unemployment.

Now, I don’t believe that this means that we will see an immediate increase interest rates, because of this change. However, throughout the 2013 year and according to analysts, including Freddie Mac’s recently released report, we should see some upward movement in interest rates.

Meaning that throughout 2013, we will still have very low long term interest rates on home loans. However, the rates at the end of the year or even mid-year could be a bit higher than we see right now. Experts seem to believe that rates will still stay below 4% on 30 year fixed mortgages, but could be closer to 4% as opposed to 3%, reflecting a reversal from what we saw in 2012.

As always we will continue to keep you updated on the latest in the mortgage and real estate market. The latest numbers do seem to point to lower rates in the near future, as opposed to six months from now. However, rates should remain relatively low throughout 2013.

FHA Home Loan Changes Coming January 1st

Bill Kamboukos (Strategic Mortgage) — Mon, 03 Dec 2012 13:57:00 -0800

FHA Home loans will have new changes going into effect on January 1^st, 2013. Recently, HUD, which oversees the FHA announced their latest budget numbers and announced a slew of new methods they will use to try make the agency’s finances more balanced.

Specifically, here are the two most important parts of their announcements for someone considering get an FHA loan after January 1^st.

1) FHA Mortgage Insurance annual premiums (MIP) will be moving from 1.25% to 1.35% for borrowers who make a 5% or less down payment.

2) The policy of a homeowner being able to cancel the MIP on their FHA loan after 5 years, if they are at 78% of the value of their home will be eliminated.

Now moving from 1.25% to 1.35% on an annual basis may not seem like a big deal, but is just the latest escalation of mortgage insurance premiums on FHA loans. Just three years ago, monthly mortgage insurance on FHA loans were set at .55%. That means that in the past three years as the Government has crafted programs to push down home loan interest rates, the FHA has raised the annual cost of their mortgage insurance from $91.67 per month to $225 per month on a $200,000 loan. That’s quite a jump and unfortunately, as we had warned in past articles, it doesn’t seem as there is an end in sight.

In addition, the new policy to never allow for the cancellation of this mortgage insurance will also hurt new homeowners who decide to keep FHA loans for the long term. As they will never be able to eliminate the mortgage insurance associated with it. In fact, those who have an existing FHA loan, also may be further deterred from refinancing into a new FHA loan, knowing that they will never be able eliminate the mortgage insurance associated with it.

Home Mortgage - Loan Limits Stay Constant For 2013

Bill Kamboukos (Strategic Mortgage) — Mon, 03 Dec 2012 10:25:24 -0800

The 2013 Calendar year is right around the corner and all home mortgage loan limits are set to remain constant for the 2013 fiscal year.

Conventional loan limits, those loans backed by Fannie Mae and Freddie Mac will remain at $417,000. With any loan above this level remaining a Jumbo loan.

FHA loan limits had temporarily dipped, before being reinstated to higher levels earlier this year. In 2013, in Maricopa and Pinal counties here in Arizona the FHA loan limits will remain at $346,250. FHA loan limits do vary by county, so for other areas, you must check with HUD to see your local loan limits.

Finally, for VA loans there have never been any specific loan limits, though most lenders will list $417,000 as a general loan limit for a Veteran's Administration loan. It is however possible to obtain a home loan that is over $417,000 with proper eligibility.

Keeping loan limits in place for home loans was expected for 2013 for all programs. The bigger changes in the coming year will come inside the loan programs themselves, as we continue to see changes to conventional, FHA and VA loans. As always, we will continue to provide updates as they do become available.

Experts Predict Rising Mortgage Rates in 2013

Bill Kamboukos (Strategic Mortgage) — Thu, 25 Oct 2012 11:49:42 -0700

The 2012 calendar year has seen the lowest mortgages rates in a lifetime, as long term interest rates hit their lowest levels ever in fact. And while the Federal Reserve has promised to do their part, to try and keep rates low in the coming year, experts believe that we will actually see a slight increase in interest rates in the 2013 calendar year.

The Mortgage Bankers Association recently released their 2013 mortgage rate forecast and they believe that interest rates will actually move up slightly in ever quarter in 2013, with 30 year fixed rates firmly establishing themselves above 4%. This would certainly be a move up from this year when 30 year fixed rates have firmly entrenched themselves in sub 4% levels for much of the year.

While, perhaps no one can truly know what will happen in 2013, with so many issues to be resolved still on the table, both here in the United States and in Europe. It would not be surprising if we did not stay at the levels we are currently at, because we have hit an all time bottom and there is far more room for interest rates to climb than there is for them to fall at their current levels.

Even if do interest rates rise, there is also not a reason to believe that they will do so dramatically and should remain at attractive levels for quite some time. However, if you have been putting off a refinance or even home purchase, trying to time the bottom for interest rates, we may already be there and things may soon be going back up.

As always, we will provide more coverage as events that move the mortgage and real estate market unfold.

Reduced Appraisal Requirements For Refinance Mortgages

Bill Kamboukos (Strategic Mortgage) — Tue, 18 Sep 2012 19:16:40 -0700

As interest rates continue to remain at all time levels, more and more homeowners are looking to refinance their existing home loans. One of the key items that has kept many homeowners from being able to refinance in the past few years though has been the amount of equity in their homes. However, in areas, such as here in Maricopa and Pinal counties in Arizona, 2012 has finally brought about increases in home values, now making it easier for many homeowners to refinance.

Not only have home values gone up, but for many refinance programs, appraisals are either not needed at all or limited appraisals are now needed.

FHA Loans: If you have an FHA mortgage, you can refinance your home through an FHA streamline refinance and you do not have to worry about the value of your home, as the original purchase price of your home will be used as the value of your home. Meaning that even if your home has dropped in value in recent years, there is still an option for you to refinance.

VA Loans: If you have a Veterans Administration loan or a VA loan, the rules are very similar to FHA loans in that you can refinance through a VA Irrl loan or as it is more commonly known, the VA streamline without an appraisal.

Conventional Loans:Finally, when it comes to conventional home loans, things get a bit more complex. Historically when refinancing a conventional home loan, you almost always needed a full appraisal, but that is not the case anymore. The key to knowing what type of appraisal you do or do not need is completing a full loan application and then obtaining a DU approval from Fannie Mae’s automated underwriting system. More and more in the current marketplace, we are seeing options to skip an appraisal all together, or to obtain limited appraisals, such as a 2075 exterior only appraisal, which does not even have to have a value listed. In this way, many homeowners who are looking to refinance their conventional or even refinance into a conventional loan are saving money and the hassle involved in appraisal. Meaning that even if you are not sure how much equity you have in your home, it may make sense to looking into a conventional refinance, with interest rates so low. You too might be able to take advantage of reduced appraisal requirements.

As always, it makes sense to contact a qualified and licensed lending professional, such as Strategic Mortgage and explore all of your home loan options.

Revised HARP Guidelines Coming

Bill Kamboukos (Strategic Mortgage) — Tue, 18 Sep 2012 15:35:47 -0700

The HARP refinance program for homeowners who have Fannie Mae and Freddie Mac owned loans, but owe more than their homes are worth has seen multiple versions of the program and its guidelines in recent years. It however has been perhaps the only recent Government mortgage initiative, which has at least worked for many homeowners.

HARP, the Home Affordable Refinance Program, allows borrowers to refinance mortgages that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. While the loan to value must be at least 80%, there are no loan to value maximums.

In the prior versions of HARP the program required that at least one borrower have a source of income that could be verified. However, now income guidelines for HARP have been changed. Verification of income from at least one borrower is no longer required. Instead, sufficient assets can be documented and used for approval.

Homeowners must show proof that there is a minimum of 12 months of mortgage payments in reserves for the subject property. Mortgage payments equal principal, interest, real estate taxes, homeowners insurance and, if applicable, homeowners association dues or fees. If funds that equal these payments for 12 months can be documented with checking accounts, savings accounts, money market accounts, liquid investments such as bond, stocks and mutual funds, and vested money in retirement accounts, then you no longer need to provide any income documentation.

Furthermore, lenders will no longer be required to verify and source large deposits on bank or other financial statements.

While, this is not a guideline change that will help out all homeowners who cannot refinance through HARP presently, it is a move that should allow homeowners with limited income or perhaps self-employed borrowers who make their payments, to now refinance through HARP.

As always, it is best to contact a qualified mortgage lending professional, such as Strategic Mortgage, to see how this or any other refinance program could benefit you.

Fannie Mae and Freddie Mac – Introduce Streamlined Short Sale Guidelines

Bill Kamboukos (Strategic Mortgage) — Mon, 27 Aug 2012 15:26:16 -0700

Recently, Fannie Mae and Freddie Mac, the two government backed mortgage giants that back most conventional loans, issued a revised set of guidelines, in an effort to streamline the short sale process.

The new guidelines will go into effect November 1, 2012 and will permit a homeowner with a Fannie Mae or Freddie Mac mortgage to sell their home in a short sale even if they are current on their mortgage if they have an eligible hardship.

According to the release from the agencies, “Servicers will be able to expedite processing a short sale for borrowers with hardships such as death of a borrower or co-borrower, divorce,

disability, or relocation for a job without any additional approval from Fannie Mae or Freddie

Mac.

Here are the new guidelines:

• Offer a streamlined short sale approach for borrowers most in need: To

move short sales forward expeditiously for those borrowers who have missed several

mortgage payments, have low credit scores, and serious financial hardships the

documentation required to demonstrate need has been reduced or eliminated.

• Enable servicers to quickly and easily qualify certain borrowers who are

current on their mortgages for short sales: Common reasons for borrower

hardship are death, divorce, disability, and distant employment transfer or relocation.

With the program changes, servicers will be permitted to process short sales for

borrowers with these hardships without any additional approval from Fannie Mae or

Freddie Mac, even if the borrowers are current on their mortgage payments. Borrowers

will now qualify for a short sale if they need to relocate more than 50 miles from their

home for a job transfer or new employment opportunity.

• Fannie Mae and Freddie Mac will waive the right to pursue deficiency

judgments in exchange for a financial contribution when a borrower has

sufficient income or assets to make cash contributions or sign promissory

notes: Servicers will evaluate borrowers for additional capacity to cover the shortfall

between the outstanding loan balance and the property sales price as part of approving

the short sale.

• Offer special treatment for military personnel with Permanent Change of

Station (PCS) orders: Service members who are being relocated will be

automatically eligible for short sales, even if they are current on their existing

mortgages, and will be under no obligation to contribute funds to cover the shortfall

between the outstanding loan balance and the sales price on their homes.

• Consolidate existing short sales programs into a single uniform program:

Servicers will have more clear and consistent guidelines making it easier to process and

execute short sales.

• Provide servicers and borrowers clarity on processing a short sale when a

foreclosure sale is pending: The new guidance will clarify when a borrower must

submit their application and a sales offer to be considered for a short sale, so that last minute

communications and negotiations are handled in a uniform and fair manner.

• Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders

to expedite a short sale. Previously, second lien holders could slow down the short

sale process by negotiating for higher amounts.

The guidelines also say that borrowers will not be eligible for a new mortgage backed by Fannie Mae or Freddie Mac for at least two years after a short sale.

This is a good move on the part of Fannie Mae and Freddie Mac and one that should have been taken a while ago, but better late than never. As we move toward the end of the year, this will hopefully further streamline the short sale process for those with Fannie Mae and Freddie Mac home loans.

Homeowners Paying Down Their Mortgages From Jumbo To Conventional

Bill Kamboukos (Strategic Mortgage) — Mon, 27 Aug 2012 15:23:37 -0700

As interest rates continue to sit at historical lows, many homeowners have taken this opportunity as a time to refinance into a fixed rate home loan. Inevitably interest rates will rise and for this reason it makes sense to lock into a fixed rate sooner rather than later.

While interest rates are very low for all home loans, if you are looking for a fixed rate loan and you have a jumbo mortgage (over $417,000 in almost all of Arizona), you will see a higher fixed rate available. That is because the Jumbo market is essentially a private market for mortgages, as opposed to conventional loans, which are backed by Fannie Mae and Freddie Mac.

Given this fact, many homeowners who have Jumbo mortgages and are looking to lock into a fixed rate loan, are now considering paying down their mortgages to the conventional loan limit of $417,000 and then refinancing. As this would allow them to trade in their jumbo loan for a new fixed rate conventional loan, at a lower interest rate.

Now obviously, this only applies to those who have the funds to do so, but here in Arizona especially, there are many homeowners with mortgages just slightly above the conventional loan limits. For those homeowners, it may make sense to pay down the mortgage and lock into a very low fixed rate.

If you are considering refinancing your Jumbo mortgage and paying down your existing loan to a conventional loan, as always please contact a licensed lender, such as Strategic Mortgage, to discuss all of your options. It may not be the right choice for everyone, but for many homeowners it could be a wise decision to lower your loan balance and lock into a low fixed conventional loan rate.

More Homeowners Turning To 15 and 10 Year Fixed Loans

Bill Kamboukos (Strategic Mortgage) — Mon, 06 Aug 2012 11:26:37 -0700

As has been much documented, the past year has seen overall mortgage rates reach new all time lows. We are now at levels where the traditional 30 year fixed loans have gone below 4% with 15 and 10 year fixed loans now at or below 3%. This has meant increased afforability for new homeowners and also for existing homeowners looking to refinance.

In turn, more and more homeowners are starting to consider and taking 15 year and 10 year fixed mortgages, as opposed to the more common 30 year fixed mortgages. This is now a means to an end to pay off their homes sooner and less expensively. While 30 year fixed loans are at all time lows, shorter term mortgages are also at all time lows and cheaper than they have ever been. Borrowers who can afford the monthly payment of 15 or 10 year fixed mortgage now have a clearer path to eventually paying off their mortgage.

For many homeowners, they see now as the time to take the shorter mortgage and stick with it for the lifetime of the loan, as current interest rate levels may soon be gone for good. For those homeowners who can afford the higher payment that a 15 or 10 year fixed loan provides as opposed to a 30 year fixed home loan, now may be the time to consider to refinance one last time and commit to pay off the mortgage.

Fannie Mae & Freddie Mac - will not reduce principal on mortgages

Bill Kamboukos (Strategic Mortgage) — Mon, 06 Aug 2012 11:23:30 -0700

Fannie Mae and Freddie Mac, the two now government controlled mortgage giants were asked by the Federal Government to consider principal reductions on mortgages, as a way to assist struggling and upside down homeowners to help stabilize the housing market. After a month of deliberation, Fannie Mae and Freddie Mac announced that they would not be reducing principal balances on any mortgages.

Edward DeMarco, the agency's acting director said in a statement. The, "FHFA has concluded that the anticipated benefits do not outweigh the costs and risks."

However, soon after this release, Treasury Secretary Tim Geithner, sent an eight-page letter to DeMarco urging him to change his mind. In it, Geithner argued that allowing principal reduction would ultimately save taxpayers as much as $1 billion. "I do not believe it is the best decision for the country," Geithner wrote. "You have the power to help more struggling homeowners and help heal the remaining damage from the housing crisis."

In recent months, there has been mounting pressure to allow the Fannie Mae and Freddie Mac to reduce principal balances on mortgages.

In, fact, President Obama’s administration even offered Fannie and Freddie incentive payments of up to 63 cents per dollar of principal forgiven. Which prompted Fannie and Freddie to take another look at their analysis.

In further comments, DeMarco said that his prime directive is to minimize taxpayer bailouts of Fannie and Freddie, which have already received more than $188 billion. Reducing principal would likely increase that amount because it would lock in losses on their portfolios. Mr. DeMarco also said principal reduction would only help a maximum of 248,000 homeowners. But the companies would have to spend time and money developing and implementing such a program, which would also delay a resolution for many troubled borrowers.

Furthermore, he's also concerned that principal forgiveness could prompt many borrowers who are current with their payments to fall behind in order to prove financial hardship, one of the prerequisites for getting a loan modification. Having them default will hurt the housing market more than offering principal reduction will help it, he said.

Finally, it could hurt credit availability in the future because principal reduction would require the rewriting of a contract, which could prompt investors to shy away from mortgage-backed securities or demand higher rates in the future due to the added uncertainty.

For now, it looks like there will be no principal reductions for homeowners with Fannie Mae and Freddie Mac mortgages. It doesn’t look like this issue has gone away quite yet, but don’t expect any principal reductions in the near future.

Ways For Homeowners To Take Advantage of Low Interest Rates -FHA Loans

Bill Kamboukos (Strategic Mortgage) — Mon, 09 Jul 2012 11:38:39 -0700

This series of articles has touched on the fact that we currently are at the lowest levels we have ever seen for interest rates and the lowest we will perhaps ever see. Meaning that now is really the time to consider taking advantage of these low rates and lock in a fixed rate for a lifetime. Let's take a look a look now at some of the options available for homeowners who are looking to actually take advantage of these low interest rates who currently have FHA home loans.

Options For Homeowners Who Currently Have An FHA home loan:

FHA home loans or Federal Housing Administration home loans are loans that historically have been a loan of choice for first time home buyers or home buyers with less of a down payment to provide for the purchase of a home. However, the program is open to all potential home buyers and home owners and offers some of the best refinance programs available. One of the key characteristics of FHA home loans is that generally these loans have a private mortgage insurance payment associated with them.

Option 1: If you obtained your current FHA home loan prior to June 1, 2009

If you currently have an FHA home loan that you obtained prior to June 2009, then you are paying more than you should be on your current home loan. As we know, interest rates have continued to decline over the past three years, but at the same time, mortgage insurance costs have gone up for FHA loans. Once you take out an FHA loan, your annual mortgage insurance costs cannot increase. However, if you take out a new FHA loan, then you are subject to whatever the current FHA mortgage insurance costs are. Meaning that while interest rates have dropped, the benefit or refinancing into a new FHA home loan has been negated in recent years, as the cost of mortgage insurance has gone up. However, that all changed recently when a new FHA streamline refinance program was created for homeowners with FHA loans originated prior to June 2009 began.

This new program allows homeowners with loans originated prior to June 1, 2009 to keep their mortgage insurance premiums constant, while still refinancing to a current market interest rate. This will allow homeowners with these types of loans to maximize their savings.

In addition, the FHA streamline refinance program is one of the least restrictive refinance programs available. In general, you do not have to pay closing costs to refinance, you only need a 620 credit score and to be on time on the mortgage being refinanced. In addition, employment is verified, but not income and the original purchase price of your home is used as the appraised value of your home. Meaning that if you have an FHA loan and a job and are making your payment, you can probably complete an FHA streamline refinance free of charge and lower your interest rate now.

Option 2: If you obtained your current FHA home loan June 1, 2009 or later

If you obtained your current FHA home loan in June 2009 or prior, you will be subject to current FHA mortgage insurance costs. However, chances are, if this is you, then you probably have a higher mortgage insurance costs associated with your current home loan anyway, so the difference may not be that much.

However, with interest rates as low as they are, the savings may still be there for you to complete an FHA streamline refinance. As mentioned above in the article, there is often no cost to complete an FHA streamline and the process is much like its name, very streamlined. There are no differences in the streamline refinance process, regardless of when you obtained your FHA home loan.

So, if you have an FHA home loan, look into a streamline refinance sooner rather than later. It can be a process that saves you money in the short and long term, without cost.

As always, contact a licensed mortgage lender to discuss all of your options and see what makes sense for your specific situation.

Ways For Homeowners To Take Advantage of Low Rates -Conventional Loans

Bill Kamboukos (Strategic Mortgage) — Mon, 09 Jul 2012 11:24:14 -0700

In the first part of this series of articles, we touched on the fact that we currently are at the lowest levels we have ever seen for interest rates and the lowest we will perhaps ever see. Meaning that now is really the time to consider taking advantage of these low rates and lock in a fixed rate for a lifetime. Let's take a look a look now at some of the options available for homeowners who are looking to actually take advantage of these low interest rates with conventional home loans.

Options For Homeowners Who Currently Have A Conventional Loan:

A conventional home loan is a term that is generally used for a loan that is Fannie Mae or Freddie Mac backed. These types of loans comes in different forms, as your loan could be a 30 year fixed mortgage, a 15 year fixed mortgage or even an adjustable rate mortgage.

Option 1: If you have equity in your home

If you have some equity in your home and a conventional loan than the options are wide open for you. Depending on how aggressive you would like to be in paying off your home and watch stage you are in life, a 30 year or 15 year fixed mortgage will probably make the most sense. For most homeowners, with interest rates below 4% on 30 year fixed loans, it will make the most sense to lock into a low rate 30 year loan, for a low payment and rate combination. However, if you are closer to retirement age or it is financially viable, a shorter term loan may make sense as well.

In the current marketplace, if you have equity in your home, you may or may not even need to have an appraisal done on your home when refinancing. For instance, if Fannie Mae’s automated underwriting system agrees with your estimated value of your home, they may offer an appraisal waiver or an exterior only appraisal. In the current market, this is actually more and more common, further reducing financing costs and complications.

Option 2: If you do not have equity in your home

If you have a conventional loan and are in a situation where you do not have any equity in your home or you are upside down on your home, don’t worry there are options available. As discussed in recent articles, the HARP refinance program is in full swing and is actually a program that does work for homeowners without equity in their homes.

If your loan is owned by Fannie Mae or Freddie Mac, the HARP refinance program will allow you to refinance, without an appraisal, to a new loan rate fixed loan. To qualify for the program, first and foremost you must have a Fannie Mae or Freddie Mac loan obtained prior to June 2009. Next, you must be on time on your current home loan and you must have income to support your mortgage payment, just like you if you were qualifying for a regular refinance. However, you do not have to have equity in order to complete this type of refinance, as the program is more concerned with identifying how much your home is worth, not how much you are upside down. The HARP program is expected to run until December 2013, but my recommendation would be to act sooner rather than later if this program could help you, as nothing is guaranteed to continue on this program.

So, if you have a conventional loan and equity in your home, now is the time to act to lock into a low fixed rate. Even if you refinanced in recent years, it may make sense to refinance one more time, before we hit that eventual upward trend in interest rates.

While, if you do not have equity in your home, the HARP program is here now, with no guarantees for how long it will last. Take advantage of being able to refinance your home even if you have little or no equity.

As always, contact a licensed mortgage lender to discuss all of your options and see what makes sense for your specific situation.