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By Brendan Fontaine | Mortgage Broker
or Lender in Auburn, ME
  • Maine MAINE FHA Streamline Refinance Mortgage Guidelines | Updated For Summer 2013

    Posted Under: Market Conditions, Home Buying, Financing  |  June 24, 2013 7:13 PM  |  284 views  |  1 comment

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    NOTE: MAINE FHA Streamline Refinance information is accurate as of today, June 3, 2013. If you get your MAINE FHA Streamline Refinance information elsewhere online, it may be inaccurate or out-of-date. MAINE FHA mortgage guidelines change often.

    What Is An MAINE FHA Streamline Refinance in Maine?

    The MAINE FHA Streamline Refinance is a special mortgage product, reserved for homeowners with existing MAINE FHA mortgages. MAINE FHA Streamline Refinances are the fastest, simplest way for MAINE FHA-insured homeowners to refinance their respective mortgages.

    The MAINE FHA Streamline Refinance program's defining characteristic is that it does not require a home appraisal. Instead, the MAINE FHA will allow you to use your original purchase price as your home's current value, regardless of what your home is actually worth today.

    In this way, with its MAINE FHA Streamline Refinance program, the MAINE FHA does not care if you are underwater on your mortgage. Rather, the program encourages underwater mortgages. Even if you owe twice what your home is now worth, the MAINE FHA will refinance your home without added cost or penalty.

    The "appraisal waiver" has been a huge hit with U.S. homeowners, allowing unlimited loan-to-value (LTV) home loans via the MAINE FHA Streamline Refinance program. Homeowners in places like Florida, California, Arizona and Georgia have benefitted greatly, as have homeowners in other states and cities affected by last decade's housing market downturn.

    Beyond this "no appraisal" feature, however, the MAINE FHA Streamline Refinance behaves very much like any other loan product. It's available as a fixed rate or adjustable mortgage; it comes as a 15- or 30-year term; and there's no MAINE FHA prepayment penalty to worry about.

    Another big plus is that MAINE FHA mortgage rates are the same in the MAINE FHA Streamline Refinance as with a "regular" MAINE FHA loans. There's no penalty for being underwater, or for having very little equity.

    Check your MAINE FHA Streamline Refinance eligibility.

    MAINE FHA Streamline : No Verification Of Job, Income, Credit

    Another big plus is that the MAINE FHA Streamline Refinance is fairly easy for which to qualify.

    Earlier this decade, in an effort to help U.S. homeowners, the MAINE FHA abolished most of the typical verifications required to get a mortgage. So, today, as it's written in the MAINE FHA's official mortgage guidelines;

    1. Employment verification is not required with an MAINE FHA Streamline Refinance
    2. Income verification is not required with an MAINE FHA Streamline Refinance
    3. Credit score verification is not required with an MAINE FHA Streamline Refinance

    4. There's no need for a home appraisal, either, so when you put it all together, you can be (1) out-of-work, (2) without income, (3) carry a terrible credit rating and (4) have no home equity. Yet, you can still be approved for an MAINE FHA Streamline Refinance.

    That's not as crazy as it sounds, by the way.

    To understand why the MAINE FHA Streamline Refinance is a smart program for the MAINE FHA, we have to remember that the MAINE FHA's chief role is to insure mortgages -- not "make" them.

    It's in the MAINE FHA's best interest to help as many people as possible qualify for today's low mortgage rates. Lower mortgage rates means lower monthly payments which, in theory, leads to fewer loan defaults.

    This is good for homeowners that want lower mortgage rates and for the MAINE FHA -- but mostly for the MAINE FHA.

    Check your MAINE FHA Streamline Refinance eligibility.

    Are You MAINE FHA Streamline Refinance Eligible?

    Although the MAINE FHA Streamline Refinance eschews the "traditional" mortgage verifications of income and credit score, as examples, the program does enforce minimum standards for applicants. The official MAINE FHA Streamline Refinance guidelines are below. Note that not all mortgage lenders will underwrite to the official guidelines of the Federal Housing Administration.

    Perfect, 3-Month Payment History Is Required

    The MAINE FHA's main goal is to reduce its overall loan pool risk. Therefore, it's number one qualification standard is that homeowners using the Streamline Refinance program must have a perfect payment history stretching back 3 months. 30-day, 60-day, and 90-day lates are not allowed. One mortgage late payment is allowed in the last 12 months. Loans must be current at the time of closing.

    Click for your personalized MAINE FHA Streamline Refinance mortgage rates.

    210-Day "Waiting Period" Between Refinances

    The MAINE FHA requires that borrowers make 6 mortgage payments on their current MAINE FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.

    Employment And Income Are Not Verified

    The MAINE FHA does not require verification of a borrower's employment or annual income as part of the MAINE FHA Streamline process. There is no Verification of Employment, nor are there paystubs, W-2s or tax returns required for approval. You can be unemployed and get approved for a MAINE FHA Streamline Refinance so long as you still meet the other program requirements.

    Credit Scores Are Not Verified

    The MAINE FHA does not verify credit scores as part of the MAINE FHA Streamline Refinance program. Instead, it uses payment history as a gauge for future loan performance. This means that FICO scores below 640, below 620, below 580, and below 500 are eligible for Streamline Refis.

    The Refinance Must Have "Purpose"

    Streamline Refinance applicants must demonstrate that there's a Net Tangible Benefit in the refinance; a legitimate reason for refinancing. Loosely, Net Tangible Benefit is defined as reducing the (principal + interest + mortgage insurance) component of the mortgage payment by 5 percent or more. Another allowable Net Tangible Benefit is to refinance from an adjusting ARM into a fixed rate loan. Taking "cash out" to pay bills is not an allowable Net Tangible Benefit.

    Loan Balances May Not Increase To Cover Loan Costs

    The MAINE FHA prohibits increasing a Streamline Refinance's loan balance to cover associated loan charges. The new loan balance is limited by the math formula of (Current Principal Balance + Upfront Mortgage Insurance Premium). All other costs -- origination charges, title charges, escrow population -- must be either (1) Paid by the borrower as cash at closing, or (2) Credited by the loan officer in full. The latter is called a "zero-cost MAINE FHA Streamline". Click here for zero-cost MAINE FHA Streamline Refinance mortgage rates.

    Appraisals Not Required

    The MAINE FHA isn't concerned about home value -- it's insuring your loan regardless. Therefore, the MAINE FHA does not require appraisals for its Streamline Refinance program. Instead, it uses the original purchase price of your home, or the most recent appraised value, as its valuation point. Homes that are underwater are still MAINE FHA Streamline-eligible.

    MAINE FHA Streamline Refinance Mortgage Insurance Requirements

    The MAINE FHA Streamline Refinance is an MAINE FHA-insured mortgage, and MAINE FHA borrowers are required to make two types of mortgage insurance payments -- an upfront mortgage insurance payment paid at closing, plus an annual payment split into 12 installments, paid with your mortgage payment each month.

    With respect to mortgage insurance premiums, homeowners using the MAINE FHA Streamline Refinance program are split into two classes :

    1. Homeowners whose new loan replaces an MAINE FHA-backed mortgage endorsed prior to June 1, 2009

    2. Homeowners whose new loan replaces an MAINE FHA-backed mortgage endorsed on/after June 1, 2009.

    Homeowners in the first class -- those with "old" MAINE FHA mortgages -- pay markedly lower mortgage insurance than "new" MAINE FHA homeowners.

    Check your MAINE FHA Streamline Refinance eligibility.

    MAINE FHA Streamline Refinance MIP (For Loans Endorsed Before June 1, 2009)

    If your existing MAINE FHA mortgage was endorsed prior to June 1, 2009, your mortgage insurance premiums have been "grandfathered". You can refinance via the MAINE FHA Streamline Refinance program and pay reduced rates for both for upfront MIP and your annual mortgage insurance premium.

    Upfront Mortgage Insurance Premiums (UFMIP)

    For an MAINE FHA Streamline Refinance that replaces a loan endorsed prior to June 1, 2009, the new MAINE FHA mortgage's upfront mortgage insurance is equal to 0.01 percent of the loan size, or 1 basis point.

    For example, if your new MAINE FHA Streamline Refinance is for $100,000 mortgage, the MAINE FHA will assess a $10 upfront mortgage insurance premium (MIP) to be paid by you at closing. The MAINE FHA automatically adds the $10 payment to your new loan balance.

    Annual Mortgage Insurance Premiums (MIP)

    Annual MIP is similarly cheap for "old" MAINE FHA loans. For an MAINE FHA Streamline Refinance replacing an MAINE FHA loan endorsed prior to June 1, 2009, the annual MIP is 0.55% annually, or 55 basis points.

    The complete annual MIP schedule is as follows :

    • 15-year loan terms with loan-to-value over 90% : 0.55 percent annual MIP
    • 15-year loan terms with loan-to-value under 90% : 0.55 percent annual MIP
    • 30-year loan terms with loan-to-value over 95% : 0.55 percent annual MIP
    • 30-year loan terms with loan-to-value under 95% : 0.55 percent annual MIP

    15-year fixed rate mortgages with LTVs of 78% or less pay no annual MIP.

    For an MAINE FHA Streamline Refinance which replaces a MAINE FHA loan endorsed prior to June 1, 2009 and for which the mortgage is a jumbo MAINE FHA mortgage (i.e. loan size exceeds $625,500), no additional mortgage insurance premiums are due.

    Note : MAINE FHA jumbo loans over $625,500 are permitted in "high-cost" metropolitan areas only. This includes Montgomery County, Maryland; New York City, New York; and Fairfax County, Virginia.  Most of California, Hawaii and Alaska are MAINE FHA jumbo loan-eligible, too.

    Click for today's MAINE FHA Streamline Refinance mortgage rates.

    MAINE FHA Streamline MIP For Loans Endorsed On/After June 1, 2009

    If you are refinancing an MAINE FHA mortgage via the MAINE FHA Streamline Refinance program and your existing MAINE FHA mortgage was endorsed on, or after, June 1, 2009, your mortgage insurance premium schedule on the new loan is as follows.

    Upfront Mortgage Insurance Premiums (UFMIP)

    For an MAINE FHA Streamline Refinance replacing a loan endorsed on, or after, June 1, 2009, the MAINE FHA upfront mortgage insurance premium is equal to 1.75 percent of your loan size, or 175 basis points.

    This is $1,750 for every $100,000 borrowed. The MAINE FHA automatically adds the $1,750 premium to your loan balance for you -- it's not paid as cash. Furthermore, not all refinancing households will pay the full amount.

    For MAINE FHA-backed homeowners refinancing within the 3 years of their existing loan's start date, the MAINE FHA provides a refund on previously-paid upfront MIP. The size of the refund diminishes as the 3-year window elapses.

    For example, a homeowner who refinances an MAINE FHA mortgages after 11 months is granted a 60% refund on his initial MAINE FHA UFMIP. 30 days later, the refund drops to 58%.

    This is why is rarely a good idea to "wait to refinance" with the MAINE FHA. With the MAINE FHA Streamline Refinance program, the sooner you refinance, the bigger your refund, and the lower your total loan size. This lowers the monthly payment and preserves the home equity -- two huge positives.

    You can review your own MAINE FHA mortgage insurance refund chart at top.

    Check your MAINE FHA Streamline Refinance eligibility.

    Annual Mortgage Insurance Premiums (MIP)

    The annual MIP schedule for an MAINE FHA Streamline Refinance which replaces a loan from on, or after, June 1, 2009 is as follows:

    · 15-year loan terms with loan-to-value over 90% : 0.70 percent annual MIP

    · 15-year loan terms with loan-to-value under 90% : 0.45 percent annual MIP

    · 30-year loan terms with loan-to-value over 95% : 1.35 percent annual MIP

    · 30-year loan terms with loan-to-value under 95% : 1.30 percent annual MIP

    Note, though, that jumbo MAINE FHA mortgages are subject to an additional MIP fee.

    15-year fixed rate mortgages over $625,500 pay an additional 0.25 basis points annually. Loans with terms of 20 years or 30 years pay an additional 0.20 baiss points.

    A Los Angeles, California homeowner, therefore, borrowing at the $729,750 local loan limit with a 30-year fixed rate mortgage will pay annual mortgage insurance premiums of 1.55% to the MAINE FHA, or $943 per month.

    MAINE FHA MIP Cancelation Policy

    For some MAINE FHA-backed homeowners, annual mortgage insurance premiums are temporary. The MAINE FHA makes this determination based on the amount of home equity at the time of closing.

    For homeowners using the MAINE FHA Streamline Refinance to replaces a loan from on, or after, June 1, 2009, the MAINE FHA MIP cancelation schedule is as follows :

    • Loan-to-value of 90% or less at the time of closing : MIP required for 11 years
    • Loan-to-value greater than 90% at the time of closing : MIP required for life of loan

    · The MAINE FHA's MIP cancelation policy is the same for 15-year loan terms as for 30-year loan terms.

    Refinancing homeowners are welcome to reduce their loan balance at the time of closing to avoid paying MIP for the loan's life. In many cases, this will require an up-to-date appraisal of your home.

    This MAINE FHA MIP cancelation policy applies to MAINE FHA loans beginning June 2013. Note that MAINE FHA MIP will also be canceled in the event of a refinance to a different loan program such as a conventional loan backed by Fannie Mae or Freddie Mac, or upon sale of the home.

    Homeowners planning to move within 10 years may not be affected by the MAINE FHA's "Life Of The Loan" rule.

    Click for today's MAINE FHA Streamline Refinance mortgage rates.

    Apply For Your MAINE FHA Streamline Refinance Here

    The MAINE FHA Streamline Refinance is among the easiest and best-valued mortgage products available.

    If you have an existing MAINE FHA mortgage, get yourself a MAINE FHA Streamline Refinance rate quote. MAINE FHA mortgage rates are low and closings can occur in as few as 20 days. And, the faster you close, the bigger your MAINE FHA upfront mortgage insurance premium refund.

    Click here to get a rate quote and start your MAINE FHA Streamline Refinance application today.

    NOTE : MAINE FHA Streamline Refinance information is accurate as of today, June 3, 2013. If you get your MAINE FHA Streamline Refinance information elsewhere online, it may be inaccurate or out-of-date. MAINE FHA mortgage guidelines change often.

     

    Brendan Fontaine

    Branch Manager | Mortgage Banker

    Guaranteed Home Mortgage Company, Inc.

    w 207-602-1670 | c 207-370-5363

    f 207-510-7689 | NMLS 102571

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  • Builder Confidence At Highest Level Since 2007

    Posted Under: Market Conditions in Auburn, Home Buying in Auburn, Financing in Auburn  |  March 20, 2012 9:46 PM  |  320 views  |  No comments

    Builder confidence in the market for new single-family homes is twice as strong as it was six months ago and at its highest level since 2007. The latest National Association of Home Builders Housing Market Index, which measures builders’ expectations and perceptions, was unchanged from last month. Barry Rutenberg, chairman of the NAHB, said builders are still cautious but there’s a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving. The component gauging builders expectations for sales over the next six months was up for the six consecutive month, rising two points from the month before. Regionally, the Index was up in the Northeast, South, and Midwest but down in the West. More here.

  • Survey Finds Home Price Expectations On The Rise

    Posted Under: Market Conditions in Auburn, Home Buying in Auburn, Financing in Auburn  |  February 14, 2012 11:40 AM  |  106 views  |  No comments

    Fannie Mae’s National Housing Survey polls 1,000 Americans each month about their attitudes toward homeownership, mortgage rates, the economy, personal finances, and overall consumer confidence. January’s survey finds Americans more optimistic about the economy and the housing market. Specifically, the percentage of participants who said the economy is on the right track was up 8 percentage points from the month before and the number who said it was on the wrong track dropped 6.0 percent. On average, respondents expect home prices to rise 1.0 percent over the next year. Only 16 percent of Americans expect home prices to decline, while 79 percent said they’d rise or stay the same over the next 12 months. Doug Duncan, Fannie Mae’s vice president and chief economist, said home price expectations have been rising for the past four months and consumer sentiment has rebounded to a level witnessed a year ago. More here.

  • Americans Increasingly Optimistic, Confident In Economy

    Posted Under: Market Conditions in Auburn, Home Buying in Auburn, Financing in Auburn  |  February 14, 2012 11:39 AM  |  222 views  |  No comments

    According to Gallup, Americans’ economic confidence and sense of well being both rose in January. Gallup’s Life Evaluation Index, which asks Americans to rate their current and future lives on a scale from 0 to 10, climbed to its highest level in 11 months, increasing to 50.1 from 48.4 in December. The number of respondents classified as thriving as opposed to struggling or suffering increased to 53.4 percent from 51.9 percent the month before. Americans’ improving sense of well being is tied to gains in economic confidence. According to Gallup’s Economic Confidence Index, which has been rising since August of last year, the country’s confidence in the economy is at its highest level since May 2011, though it isn’t as high as it was a year ago. More here and here.

  • Builder Confidence Hits Highest Level Since May 2010

    Posted Under: Market Conditions in Maine, Home Buying in Maine, Home Selling in Maine  |  October 19, 2011 3:43 PM  |  220 views  |  2 comments
    The National Association of Home Builders/Wells Fargo Housing Market Index rose four points to 18 in October, the largest one-month increase since April of 2010. The index measures builder confidence in the market for newly built, single-family homes on a scale where any number below 50 indicates more builders view the market as poor than good. David Crowe, NAHB’s chief economist, said the latest boost in builder confidence is a good sign that some pockets of recovery are starting to emerge across the country. Each of the Indexes three components saw significant gains, with the component gauging sales expectations for the next six months rising seven points to 24. Regionally, the West increased nine points to 21, the highest level since August 2007, while the Midwest and South each recorded four-point increases. More here.
  • MAINE Mortgage Rates At Lowest Level Since The 1940s

    Posted Under: Market Conditions in Maine, Home Buying in Maine, Financing in Maine  |  October 5, 2011 10:14 PM  |  297 views  |  No comments
    Court Street, Auburn, ME 1940s
    DOWNTOWN AUBURN, MAINE IN THE 1940'S
    According to the Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 4.18 percent last week from 4.24 percent the week before. The 30-year rate for jumbo loan balances dropped to 4.49 percent from 4.53 percent the previous week. Despite the decreases, the Market Composite Index, which measures total mortgage loan application volume, was down 4.3 percent. Mike Fratantoni, MBA’s vice president of research and economics, said potential borrowers largely remained on the sidelines, despite the lowest mortgage rates since the 1940s. The refinance share of mortgage activity was 79.1 percent of total applications. More here.
  • Mortgage Rates Now Easily in Line With All Time Lows

    Posted Under: General Area in Maine, Market Conditions in Maine, Financing in Maine  |  October 3, 2011 7:22 PM  |  284 views  |  No comments
    by Matthew Graham
    Mortgage Rates Now Easily in Line With All Time Lows
    Oct 3 2011, 4:04PM
    Bond markets rallied heavily today and Mortgage Rates continued to improve.  Most of the gains were seen in the form of lower borrowing costs today, but some of you may see another eighth lower in rate.  On average, rates are in line with all time lows.

    Today's Rates: 
    • BEST EXECUTION 30YR FIXED -Firmly 3.875%, Some 3.75% availability
    • FHA/VA - still at 3.75% !!
    • 15 YEAR FIXED- 3.375%, 3.25% getting closer to viable
    • 5 YEAR ARMS - low to mid 3% range, variations from lender to lender.
    Ongoing Guidance: I'd lean more heavily toward locking when Best-Ex is under 4.0 these days. While I'm optimistic that there are a few more gains in store for MBS with the beginning of new Fed Buying, I'd hate to see 3.875 unexpectedly evaporate on some surprise headline out of Europe or turning point in economic data.

    New Guidance: At these levels, only those among you who don't NEED to refinance or are otherwise willing to accept locking at an eighth higher rate or at the same rate but with significantly higher costs should consider floating. The reason is in the Mortgage-Backed-Securities ("MBS") that govern lender's rates. Think of these like "buckets." Up until recently, there were two different buckets that conforming loans could end up in and this allowed for a wider range of volatility in rates. 
    But with the Fed's recently announced commitment to reinvest it's MBS profits BACK INTO MBS, the secondary mortgage market is now almost exclusively focused on ONE bucket. The thing about these buckets that is helpful to the person deciding whether or not to lock or float is that they only hold certain mortgage rates. In the current case, we have 3.5% MBS coupons dominating the secondary. 
    As long as that remains the case, conforming loans will mostly be falling into 1 of 4 different rates. These rates are expressed in the graphic below as well as a convenient "meter" of sorts, which should generally coincide with the lock/float leanings you'll find on this blog depending on which of the 4 rates is the current Best-Execution rate. Hopefully it makes sense. Let me know your thoughts/questions and I'll elaborate as much as necessary.
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