Underwater Homeowners Can Now Refinance Mortgage Florida
Benefits To Refinance Mortgage Florida
The 2008 real estate and credit collapse have plummeted real estate values throughout the whole state of Florida. Almost every county of the state of Florida was affected by the Great Depression of 2008. Florida had the fastest real estate appreciation since 2000 until the real estate market crash in 2008 than any other state in the United States. Double digit grow year after year. Florida builders were building everywhere where homes were sold out even before breaking ground. New homes were being flipped multiple times prior to completion of the unit and homes were selling way above the asking price. Many Florida folks became real estate investors where it was not uncommon for someone to have two, three, four homes. Many mom and pop real estate investors thought the good days will continue forever and lived beyond their means thinking that real estate prices will continue to rise without any correction in the near future. Financing was easy and quick and no doc loans as well as state income loans were common where no income needed to verified like it needs to be today. Real estate investors were making more money from flipping homes than they were from their full time jobs. Doctors, lawyers, engineers, pharmacists, police officer, fire fighters, pilots, stewardess, bankers, mortgage brokers, business owners, sales people, factory workers, teachers, janitors, military personnel, secretaries, and government workers were all becoming real estate investors and the funny part was that everyone was making a killing. Then the crash of 2008 struck and when it struck, it struck hard like a Hurricane.
Real Estate Crash Of 2008
The real estate crash of 2008 affected everyone in the state of Florida. The real estate crash of 2008 affected everyone from the hourly wage earner, to the blue collar work, to the upper middle class, and the wealthy. There is not a homeowner or real estate investor that did not get affected by the real estate crash of 2008. Thousands of homeowners who thought that they had plenty of equity in their homes saw their home equity disappear. Real estate sales came to an abrupt halt. Real estate investors who had multiple investment homes turned the keys in to the mortgage lender and walked away from their properties and did a deed in lieu of foreclosure. Tens of thousands of Floridians have lost their busineses, lost their jobs they had for many years and went bankrupt. Bankruptcy courts were overloaded with bankruptcy petition and the bankruptcy rate nationwide skyrocketed to historical levels. Foreclosure rates in Florida was one of the highest in the country and tens of thousands of homeowners were left with homes whose mortgage balances were higher than the value of their homes. Homeowners who had mortgage balances higher than the balance of their homes are known to have underwater mortgages. The whole mortgage industry has collapsed and half of the mortgage companies went out of business and over half the mortgage loan originators have left the mortgage industry. The federal government created the SAFE ACT where mortgage loan originators need to get licensed and go through intensive background and credit background checks. All sub prime mortgage companies have closed their doors overnight and the new ERA of mortgage companies was set to launch where income documentation was required in order to qualify for a mortgage loan. No income documentation, no mortgage loan approval. By 2010, the Florida real estate market seemed to have stabilized.
Light At The End Of The Tunnel
Fast forward to 2010 and the whole mortgage industry went through a major overhaul. New rules and regulations came into effect. The Dodd Frank Act was enacted and the CFPB was created to protect consumers. Real estate prices started to escalate and the government has relaxed mortgage lending standards for FHA loans to promote home ownership. Homeowners with underwater mortgages are seeing their homes appreciate and many are no longer underwater and can refinance mortgage Florida while other homeowners who had underwater mortgages can now have the freedom to sell their homes and move on.
FHA Reduction Of Annual MIP And Lower Mortgage Rates Fuels Savings To Florida Homeowners: Refinance Mortgage Florida
HUD’s recent announcement that it is reducing the FHA annual mortgage insurance premium from 1.35% to 0.85% along with mortgage rates being at a two year low is phenomenal news for homeowners to take advantage of Refinance Mortgage Florida.
- FHA Annual Mortgage Insurance Premium: On January 26, 2015, HUD announced it will reduce the FHA mortgage insurance premium from 1.35% to 0.85%. This is a 0.50% savings from the old FHA mortgage insurance premium and it is a lifetime savings.
- Lowest Mortgage Rates: Mortgage rates are at a almost two year low. Combination of low mortgage rates and reduction in FHA mortgage insurance premium compounds savings to the mortgage loan borrower.
- Purchase: The combination of low mortgage rates and reduction of FHA mortgage insurance premium means more buying power for the home buyer and more savings.
- Eliminate FHA Mortgage Insurance Altogether: For those Florida homeowners who have owned their homes for the past couple of years, their homes may have appreciated 20% or more where they can eliminate the FHA annual mortgage insurance altogether if they can refinance their FHA loan into a conventional loan. Even if their equity is less than 20%, they can elimate private mortgage insurance by choosing the lender paid mortgage insurance, LPMI, where the borrower does not have to pay mortgage insurance.