On 1 October 2008, the new FHA refinance loan guidelines will go into effect as part of the economic recovery Act of 2008 and housing. This new FHA mortgage program is designed for thousands of dwellings that are exposed to a risk of foreclosure in their current conventional or sub-prime home loans.
Details of the "HOPE for the Housing Act of 2008" are as follows:
1. eligible borrowers
Only the owner-occupants who are unable to afford their mortgage payments to benefit from the program will benefit not investors or investor properties. Housing must certify under penalty of law, that they are not intentionally defaulted on their loans to qualify for the programme and must have a debt to income ratio mortgage greater than 31% of 1 March 2008.Lenders must document and check the IRS ' revenue.
2. Home Equity & share appreciation
To avoid unexpected new borrower created by 90% loan FHA insured value mortgage, the borrower must share the newly created equity and future increase equally with FHA. this obligation shall continue until the borrower sells the country of origin or refinances FHA-insured mortgage. Furthermore, the homeowner to access the newly created equity instruments will be allocated to a period of five years.
The borrower agrees to restore the following share of any increase in home equity with FHA, where the country of origin is sold or refinanced again;
(A) 100% of all received equity shall be paid if the Home Government sells or FHA borrower refinances within 1 year.
B. 90% of all equity FHA is paid out if the borrower refinances sells or within 2 years.
C. 80% of all positive equity earned FHA is paid out if the borrower refinances sells or within 3 years.
(D) 70% of all positive equity earned FHA is paid out if the borrower refinances sells or within four years.
E. 60% of all positive equity earned FHA is paid out if the borrower refinances sells or within five years.
Is 50% of all positive equity earned FHA is paid out if the sell or borrower refinances after 5 years.
Note: FHA requires an exit fee of 3% mortgage principal balance, when selling or refinances home again.
3. other requirements
Existing contingent relations
Before you participate in this program must be extinguished all subordinate relationship (such as loans for home equity loans, second, etc.).This will have to be done through negotiations with the first holder of the right of retention.
Mortgage insurance and other charges
As a part, housing and economic recovery Act of 2008 will change up Front mortgage FHA insurance premium is required for all loans FHA refinancing. Monthly rates were also MI updated the following rates of FHA MI shall begin on 1 October 2008 and will be effective for 12 months;
The FHA front MIP-compulsory for all FHA loans (may be financed at the rate of the loan).
1.75% Normal FHA 203 (b) 1,5% refinance-refinance FHA relieved 3.0%-FHASecure (Refinance for high risk borrowers who have already been delinquent on current mortgage)
MI-Monthly amount of the loan is multiplied by the following figure, and then divide by 12. result is your monthly mortgage insurance.
30-Year note 0.55% Refinance, greater than 90% of the trigger with limited territorial validity. 0 50% Refinance less than or equal to 90% of the starting with limited territorial validity.
15 Year note 0.25%-Refinance, greater than 90% of the trigger with limited territorial validity. monthly MI is not required for 15 year FHA Refinance loans with LTV 90% or less.
The process of a loan from the FHA Refinance
Each new loan will come and provided on a case-by-case basis. to get approved, your reports income, bank accounts, credit ratings and history of the work will be thoroughly investigated. new evaluation must be performed on your home in order to determine their current value.
If it does not have positive equity, then you must contact your current lender and to negotiate with them should be reduced (write) your current mortgage 90% of its estimated value, if your current lender agrees to write down, then you will be able to proceed with FHA refinance.
For more information or to get started with your Loan FHA refinancing please visit http://www.fha-101.com
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