USDA Rural Development Program announced that it is rolling out a ?Streamlined? refinance process.? In their announcement they indicate that the new program will not require an appraisal, and that it will not require that credit reports and credit scores be checked.? This program is being designed to refinance USDA home loans to USDA Home loans.? If your current mortgage is a FHA loan, for instance ? the program does not apply.
We are currently waiting to see what the Banks are saying about their underwriting ?overlays? for this streamlined refinance program.? Just because USDA Home Loans offer the program, and will guarantee the Bank (Lender) against part of the risk, doesn?t mean that the Banks will offer the program exactly as USDA has it outlined.
The real question will be how much the mortgage insurance is for this program.? The USDA Home Loan Program recently started charging a monthly insurance fee ? if the fee stays in place for the new refinance program, the ?make sense? number to refinance will be a little higher? meaning, the spread between what your current rate is compared to what your new rate will be, could need to be more than the traditional 1.5%.? So if your current mortgage is 5.75%, and the new mortgage is less than 4% APR then it might save you money.? We will be glad to compare the difference for you, and let you know the real apples to apples comparison of payments? once you calculate in the additional money you will be charged in USDA ?Monthly PMI?.
As soon as we have confirmation about the details to this refinance opportunity ? we?ll pass it along!? Call Steve Thorne, Mortgage Loan and USDA Home Loan Expert in NC? 919 649 5058 for more details!
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