I’ve been writing about the benefits of a mortgage refinance with a VA home loan for some time; however, it amazes me how many homeowners overlook their eligibility as Veterans. Mortgage refinancing with a VA loan requires no mortgage insurance or down payment if you’re purchasing and you can borrow up to 100% of your home’s value. The red tape is minimal; you just need to get certificate of eligibility from the VA. Here’s an article from HSH.com about zero down mortgage loans from the VA:
There is so much talk these days concerning the added income, assets and higher credit score it takes to qualify for a mortgage. Perhaps one of the most misunderstood conceptions out there today suggests homebuyers will need at least 20 percent down to qualify for a mortgage. That could not be further from the truth. The truth is, home loans are still available with no money down.
If you’re considering a mortgage refi to take advantage of today’s best refinance rates of the year you’ll want to pay close attention to the fees you’re charged to make sure you’re not overpaying at closing. The more you pay for loan origination and closing costs the longer it’s going to take breaking even with your lower payment before gaining any benefit from your mortgage refinance.
You can learn more about paying less for your mortgage refi by avoiding lender junk fees and markup by checking out my free Underground Mortgage Videos.
If you’re considering mortgage refinancing with FHA loans there are several things you need to know about today’s best refinance rates. FHA mortgage loans are great if you’re having trouble qualifying for a conventional home loan; however, that extra help from the government comes with a price. Private mortgage insurance (PMI) is required on every FHA loan and is quite costly. Here’s some background on mortgage insurance you need before going through with that FHA mortgage refi.
FHA Loans Require Mortgage Insurance
For FHA loans, you must pay both an upfront mortgage insurance premium, along with an annual mortgage insurance premium. The upfront mortgage insurance premium can be financed or paid as a closing cost, while the annual mortgage insurance premium is typically paid monthly.
The problem with paying for mortgage insurance is that the annual premiums are expensive and do nothing to protect you as the homeowner. PMI does absolutely nothing for you but drain your budget.
Mortgage refinance rates are near a 50-year low now so if you can get a traditional home loan you’ll be better out without mortgage insurance. If you’re a veteran consider a VA home loan for your new home loan as these loans offer many of the same benefits as the FHA loan without the PMI requirement. Another advantage of a VA loan is a streamline refinance when you’re ready for that.
You can learn more about getting the best refinance rates for your next home loan while avoiding unnecessary fees and markup by checking out my free Underground Mortgage Refinancing Videos.
Are you considering FHA mortgage refinancing for your next home loan? If so there are several things you need to know to avoid overpaying for your next home loan. Many homeowners think FHA mortgage refinancing protects them from unnecessary markup and junk fees; however, this is simply not the case which is why most of your neighbors are paying too much. Here are several tips to help prevent your next home loan from becoming an expensive mistake.
FHA Mortgage Refinancing Expenses
FHA mortgage refinancing is not all that different from refinancing with a conventional home loan. You’ll still be required to pay broker’s fees and closing costs with FHA mortgage refinancing but you’ll also be required to purchase private mortgage insurance. If you arrived here today because you’re refinancing your existing FHA mortgage loan you’re probably happy about the thought of losing your private mortgage insurance with a non FHA home loan. Private mortgage insurance is probably the biggest shortcoming of these home loans as this insurance adds hundreds of dollars to your mortgage payment and does nothing to protect you as the homeowner. Private mortgage insurance only protects your lender from certain types of losses if you default on your home loan.
Another problem with FHA mortgage refinancing is that many of your neighbors get a false sense of security with their FHA home loans. Just because your loan is backed by the government doesn’t mean you’re impervious to getting ripped off by unscrupulous brokers and lenders. You can still overpay thousands of dollars with this type of mortgage as any other. What you need to know about FHA mortgage refinancing is that there are literally people lurking at every corner trying to make a buck at your expense.
Broker Fees and Unnecessary Markup
If you want the best deal for your next home loan you’ll need to pay close attention to your broker fees and closing costs. Banks and brokers are notorious for marking up interest rates to boost their profits at your expense. The fee your broker collects for locking and closing your FHA mortgage refinancing with a higher than necessary interest rate is called Yield Spread Premium and according to the Secretary of Housing and Urban Development will costs homeowners like you and I sixteen billion dollars this year alone.
Unnecessary Mortgage Yield Spread Premium
Talk to most brokers about Yield Spread Premium and bring up the word “unnecessary” and you’ll quickly have them on the defensive. Don’t get me wrong… I’m not saying that brokers shouldn’t get paid for FHA mortgage refinancing, what I am saying is that they shouldn’t take advantage of their customers with unnecessary fees and markup.
You’re already paying your broker a perfectly reasonable fee for arranging your mortgage with the loan origination fee. Any amount of Yield Spread Premium that they collect from the lender is not only unnecessary but is at your expense.
Mortgage Yield Spread Premium is a kickback paid to loan originators who lock and close home loans with higher than necessary mortgage rates. Did you know that for every .25 percent that you unknowingly agree to overpay your broker pockets a 1% kickback from the lender? This unnecessary markup of your mortgage interest rate drives up your payments by as much as $1200 a year or more! Fortunately, Yield Spread Premium can be avoided if you find the right person to arrange your next home loan. You can get FHA mortgage refinancing for a flat one percent origination fee and walk away with a wholesale mortgage rate.
You can learn more about wholesale FHA mortgage refinancing without junk fees by checking out my free Underground Mortgage Videos.
Here’s a sample to get you started that shows how most all of your neighbors are overpaying for mortgage refinancing and what you can do to avoid their mistakes.