Does my refinance require an appraisal? If you’re looking for no appraisal refinance programs because you’re concerned that your home has lost value or you’re already underwater there is good news. Government refinance programs like HARP 2.0 offer the no appraisal refinance mortgage you’re looking for. Here’s what you need to know about getting your low equity or underwater mortgage refinanced without overpaying.
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No Appraisal Refinance Programs
Whether or not you’ll qualify for no appraisal refinance programs depends on several factors including your loan-to-value ratio, credit score, and if Fannie Mae or Freddie Mac backs your home loan. If you’re wanting cash out refinancing the chances of getting approved without an appraisal are slim to none.
For rate and term refinance your approval for today’s best refinance rates depends on whether or not you’re underwater. If your loan to value ratio is greater than 80% or you owe more than your home is worth your options may be limited to the Home Affordable Refinance Program.
Does My HARP Refinance Require an Appraisal?
In most cases your HARP 2.0 refinance does not require an appraisal. It is possible that you’ll find a lender asking for one thanks to program overlays, special rules enforced by individual lenders to limit their risk. If you’re applying for HARP and are asked to pay for an appraisal simply move on to the next lender.
The problem with HARP 2.0 is that your home has to be backed by Fannie Mae or Freddie Mac and they must have guaranteed it prior to June 1st, 2009. This requirement has left millions of underwater homeowners unable to qualify; however, rumors of HARP 3.0 changing are said to eliminate this requirement.
No Appraisal Refinance Programs With The FHA
If you’re with the FHA you can streamline refinance without paying for an appraisal because the FHA doesn’t allow cash out refinancing. This lets you to take advantage of today’s low refinance rates without verifying your income or employment.
If you’ve had an appraisal since purchasing your home the FHA will use it, if not they will simply use the purchase price of your home. As with any government refinance program you must be current on your mortgage payments and have no more than one late payment in the last 12 months. Late payments are anything considered 30+ days late.
The only catch with an FHA streamline refinance is that you must demonstrate some tangible benefit from refinancing. Lowering your payments or converting from an Adjustable Rate Mortgage to a fixed interest rate satisfy this requirement. If you’re lowering your payment it must result in a 5% reduction in your principal and interest payment including annual mortgage insurance premiums.
No Appraisal Refinance for Veterans
If you already have a VA mortgage loan the Veteran’s Administration offers an Interest Rate Reduction Refinance Loan (IRRRL). The VA home loan is currently the best deal in mortgage loans and this VA streamline refinance does not require that you pay for an appraisal.
The VA streamline refinance also allows you to roll your closing costs into the new mortgage or accepting higher refinance rates for a no-fee home loan. As with any government refinance program you cannot receive cash back at closing.
USDA Streamline No Appraisal Refinance Programs
The USDA refinance program Streamlined Refinancing for Rural America also does not require a new appraisal to qualify. As long as your payments are current and you have no more than one late payment during the past 12 months you can be approved.
The catch for the USDA streamline refinance is that your new refinance rates must be at least one percent lower than your existing interest rate and you cannot receive cash back at closing.
As you can see your no appraisal refinance options are limited to government refinance programs. If you’re underwater in your home and cannot qualify for HARP your options unfortunately at this time are limited to cash-in refinancing which will require you to pay for an appraisal.
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