Refinancing a mortgage is one of the best ways for St. Pete, Florida homeowners to save big money on their monthly mortgage payments and on the total amount that they end up paying by the time the mortgage is paid off. A refinance mortgage replaces a current mortgage by issuing a new loan to pay off the balance of the original loan, usually for the reason of locking in a lower interest rate.
These days, refinances are so popular that they account for about 4 out of 5 mortgage applications currently being processed in the U.S. This is no doubt due to the fact that interest rates have been at historic lows over the last couple of years. With the opportunity to lock in lower interest rates, homeowners across America have managed to lower their monthly mortgage payments and save considerable amounts of cash over the entire length of their mortgages.
Types of Refinances
Whenever interest rates reach levels below what borrowers are currently paying, they can try to refinance through one of the available programs available from the U.S. government. Available programs include:
To qualify for the St. Pete, Florida Home Affordable Refinance Program (HARP) refinance, a Fannie Mae or Freddie Mac backed mortgage must have been securitized by May 31, 2009, must be up to date on payments, and must not have been paid late more than once in the last year.
Borrowers under a HARP refinance are not required to meet any income requirements and are not subjected to credit or employment verifications – plus, there is no loan-to-value limit, which means that homeowners can qualify for the program no matter how far underwater they are. This program, which has already helped millions of homeowners, will only be available until December 31st, 2013.
FHA Streamline Refinance
Homeowners with an FHA backed loan may be eligible for an FHA Streamline Refinance. In order to qualify, the current mortgage must be 210 days old or older, the refinance must produce a “Net Tangible Benefit”, and payments on the current mortgage must have been on time for the last three months. Income, asset, credit verifications, and appraisals are not required. An FHA refinance can be applied to a primary residence, vacation home, or investment property as long as the property was originally endorsed by the FHA by May 31st, 2009.
VA Streamline Refinance
VA backed loans, usually issued to military veterans and certain surviving family members, can be refinanced under the Interest Rate Reduction Refinance Loan (IRRRL) program of the Department of Veterans Affairs. The VA requires that holders of VA mortgages show that they previously occupied the mortgaged property, have not missed more than one on-time mortgage payment in the last year, and that the refinance, if granted, will actually lower the borrower’s monthly mortgage payment (unless the mortgage is an ARM-to-Fixed Rate refinance).
USDA Streamline Refinance
Loans backed by the USDA can be refinanced under the agency’s Streamline Refinance program. Unfortunately, this program is currently only a pilot and is not available to all USDA backed borrowers. Qualifying borrowers must hold the mortgaged property as their primary residence, live in one of 19 approved state, and be current on all payments for the last year.
Chris Brown is the premier expert on HARP loans and Government FHA and VA loans. Please visit The Mortgage Chili Blog