In previous articles, we have talked about the “underground refinance boom”, and how banks would love for you to stay in debt forever. We have also talked about the interest rates being at a 50 year low. Paying off your mortgage is still the last thing they want, but what you probably really want to know is how it’s affecting not only conventional loans, but FHA loans in California. Keep in mind, that it is now more critical to understand how FHA loans work. Back in June of this year, Reuters made a statement about California’s housing market that would shake me to my core, and here is what they had to say.
Reuter’s Speaks Out
Reuters stated back in June, that the housing market in California was bottoming out. I resounded that phrase in my head; “Bottoming out?” How is this possible? The same state that is known for high property values, Hollywood and stardom was the same state that everybody desired to live in, not to mention soaking up our sun. So, I didn’t really initially grasp how this was happening. Because I am an FHA specialist, I couldn’t understand with the number of FHA loans in California that I have done, how did this happen? I can also tell you, based upon my knowledge of FHA loans, that they are more than likely the best option for any borrower.
They also said that the recovery was slim in the prices of homes that were purchased between 2003 and 2008. This included home purchased on conventional home loans, and FHA loans in California. According to Reuters, these homes should have been the ones most likely to default, because these were purchased during the housing bubble, and it was an active time both for purchasing and refinancing. Those that were buying were really planning on the fact that their homes would really be worth a fortune in the future, but our economy has forced us to believe otherwise. However, it is less likely that FHA loans would default because of the way they are structured, and what they require.
Why Do These Statistics Matter?
The exact numbers aren’t important, but what is important for you to know is what they mean. First of all, if you are underwater on your mortgage, I can help you. There is a refinance option for you. FHA loans in California, is simply a matter of you knowing what your loan limits are, and that is based upon the county that you live in. that will give you a lower rate on your current mortgage, which means ultimately lowering your payments. Additionally, you won’t even need an appraisal! That’s right I can help you get into a better loan, where an appraisal isn’t needed. The reason no appraisal is needed, is because FHA loans cannot leave you upside down in your mortgage. All you need to know is that you must be current on your mortgage and you must own the home, meaning it cannot be a rental property. Secondly, in order to go without an appraisal, you must currently have an FHA insured loan. You can certainly get an FHA loan if you don’t have one already, but those who are currently in a non-insured loan with FHA, would need an appraisal.
How Do I Qualify for This FHA Streamline?
In order to qualify for the streamline, you must have a FICO score of 640. The FHA loan requirements state that the loan must be a benefit to you as well, meaning it lowers your principal and interest payment. The final outcome of your loan, cannot give you more than $500 cash back at closing as a result of your loan. The borrower doesn’t need to have verification of their income, but a paystub is required so that the lender can see that the borrower does have the ability to repay the loan. If you have a second mortgage, don’t worry. It can remain in place, so long as it allows the other loan to be first place. If you are in a fifteen year mortgage term right now, then you won’t be able to stretch your loan out to a 30 year loan. This is simply how FHA loans work in regards to a streamline refinance.
As far as the mechanics of your loan, what your loan can include is the unpaid principal balance, minus any refund credit of the mortgage insurance premium, plus the new upfront MIP if it is to be financed into the mortgage. Additionally, no termite report is required and the borrower only needs to bring one bank statement and one mortgage payment to the closing table, for FHA loans in California. Lastly, you cannot be delinquent on any federal debt.
This is pertinent information if you are considering doing a refinance, because there is no time like today to do it. Rates are so low, that you may NEVER have to refinance again! You could get an interest rate as low as 4.5% if you qualify. Why wait? Pick up the phone today and call me, so that we can discuss your options further by calling 310-498-2700. You can also email directly at mdallal@fhaloansnow.net, or you can visit my website where you can use my FHA loan calculator to plug in the numbers and see what your potential payment could be. Until next time, count your blessings.
Mayer Dallal
Learn more about FHA Home Loan. Stop by Mayer Dallal’s site where you can find out all about FHA loans California and what it can do for you.