Rate And Term Refinance Mortgage Loans Versus Streamlines

This BLOG On Rate And Term Refinance Mortgage Loans Versus Streamlines Was UPDATED On October 19th, 2017

Rate And Term Refinance Mortgage Loans may require full documentation as well as a new home appraisal. The easiest and fast track refinance loan program are the FHA Streamline Refinances and VA Streamline Refinances.

These two refinance loan programs is fast tracked and works as follows:

  • No Appraisal Required
  • No Income Documentation Required
  • No Credit Scores Required
  • The only documentation required is timely mortgage payments for the past 12 months

Reason For Rate And Term Refinance Mortgage Loans Versus Streamlines

There are times when a rate and term refinance mortgage loans is required versus FHA Streamlines and/or VA Streamline Refinances.

Here are cases where a full rate and term refinance mortgage loans versus streamlines makes sense:

  • Refinancing to get non-occupant co-borrower off mortgage note
  • Refinancing FHA into Conventional Loans
  • Doing a cash-out refinance mortgage
  • Refinancing an adjustable rate mortgage to a fixed rate mortgage
  • Refinancing from owner occupant to investment property
  • One to four unit properties
  • Full home appraisal required
  • If it is just rate and term refinance mortgage loans, no more than $500 cash back at closing can be received by borrower
  • Payoff statement is required

Maximum LTV/CLTV For Rate And Term Refinance Mortgage Loans

The maximum mortgage loan amount is the lesser of the following on FHA Loans:

  1. 97.75% of the appraised value or the acquisition costs as applicable on and/or:
  2. The sum of the outstanding mortgage loan balance of the first lien up to 2 months of pro rate mortgage insurance premium  if paying off a FHA Loan, closing costs, prepaids, borrower paid discount points, purchase money seconds, non-purchase money second liens ONLY IF at least 12 payments have been made
  3. Prepayment penalties, accrued late charges, escrow shortages, borrower paid repairs required by the appraisal, minus any refund of UFMIP.
  4. Prepaid expenses are limited to per diem interest and hazard/flood property taxes and mortgage insurance impound).

Loan To Value And Refinance

In the event if the mortgage loan being paid off is not a FHA insured mortgage loan and the borrowers have owned and occupied the property less than one year prior to the mortgage application date, the Loan To Value is based on the lesser of the current appraised value or original acquisition cost.

  • By this it means the sales price plus any documented costs to repair, renovate, or weatherize the property plus any closing costs including reasonable discount points.
  • Or total of all mortgage liens held against the property.
  • Use current home appraised value for all other scenarios

The existing mortgage loan outstanding balance may include up to 60 days of mortgage interest as follows:

  • 30 days of mortgage interest for the month that preceed the month of closing, and/or
  • Up to 30 days of interest for the month of closing

Delinquent Interest

The Gustan Cho Team at USA Mortgage offers escrow advances to mortgage borrowers to make the refinancing happen. Delinquent mortgage interests, late fees, and/or escrow shortages may not be included in outstanding principal balance of the mortgage loan balance being paid off for the maximum mortgage calculation.

Occupancy Of Former Investment Property Rate And Term Refinance

Here are the following mortgage guidelines that applies when borrowers are re-occupying a property that was formerly used as an investment property but now is going be used as an owner occupant property:

  1.  If re-occupied as owner occupant primary home for 12 or more months prior to the initial application date, the maximum financing is permitted.
  2. If re-occupied for less than 12 months prior to the initial mortgage loan application date, then it is allowed as a rate and term refinance mortgage loans only but the LTV/CLTV is limited to 85% Loan To Value.

 

Secondary Financing

Secondary financing such as second mortgages/HELOC may remain outstanding and subordinated as long as the combined CLTV liens do not surpass teh 97.75%.

Qualifying For Rate And Term Refinance Mortgage Loans

Mortgage borrowers who need to qualify for any type of refinance mortgages, please contact The Gustan Cho Team at USA Mortgage at 1-800-900-8569 or text us at 262-716-8151 for faster response. Or email us at gcho@usa-mortgage.com. We are direct lenders licensed in multiple states with no lender overlays on government and conventional loans.

Gustan Cho NMLS ID # 873293

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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