Sunday, August 8, 2010

FHA Loans - helping homeowners where conventional loans leave off, part 2

FHA Loans - Helping homeowners where conventional loans leave off part 2

I just posted a FHA Refinance Case Study for a loan over $417K, here is another FHA Refinance Case Study to show another area where FHA can help homeowners.

Let's say you live in Los Angeles California. Your home is now worth $400K. Your First Mortgage is $340K, and you have a small second mortgage of $36K, which you used to finance your child's college expenses. Your first loan has been denied for a HARP (Home Affordable Refinance Program, aka DU Refi +) due to the fact that it was a Non-conforming mortgage from Ameriquest. That rate is now set to adjust, and you explore Refinance options further before your payment increases. The big bank says no, because you live in California, their limit for a conventional loan is 90% in CA. Also, Fannie Mae and Freddie Mac consider your second mortgage payoff as a Cash Out Refinance. Fannie Mae and Freddie Mac limit the maximum Loan to Values for Cash out refinances as well as charging higher rates for all of their cash out refinances, even at lower LTV's or Loan to values.

The solution is a FHA Refinance. We can offer you a FHA refinance that will pay off your first mortgage and second mortgage. The FHA Loan will combine these into one fixed rate 30 year mortgage and will not penalize you for paying off the second mortgage with this refinance. This scenario is considered a FHA Refinance, not a FHA Cash Out Refinance.

With a FHA Cash Out Refinance, you can consolidate debts, get cash for home improvement, college expenses, etc. We offer FHA Cash Out Refinances up to 85% of your homes value (85% LTV).

Call us to find out if an FHA Loan can help you. 760-752-4480 - ask for Brian Skaar. VanDyk is a FHA Direct lender and VA Direct Lender. We have been making FHA, VA, and Conventional Loans since 1987.

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