Mortgages Made Simple with Rick Gundzik

Thursday, October 1, 2009
The State of the FHA Streamline Program
Today we welcome a guest blogger... Brandon Laughridge from MortgageLoanPlace.com Mortgages Made Simple logo

Mortgage refinance applications continue to pour in nationwide as homeowners look to take advantage of falling rates.

As a whole, mortgage applications in mid-September hit their highest level since May, with refinancing applications increasing 17 percent from the week prior, according to data from the Mortgage Bankers Association.

"The steady improvement in housing is continuing," Joel Naroff, chief economist at Naroff Economic Advisors Inc., told Bloomberg News after the MBA figures were released. "This sector is likely to start adding to growth rather than holding back the economy."

The MBA's index of applications rose 13 percent for the week ending Sept. 18. The association's refinance index jumped almost 23 percent, the largest single jump since March.

With interest rates now hovering near 5 percent, there's no better time to consider a refinance. That's especially true for FHA loan recipients, who can take advantage of one of the most flexible and economically efficient refinance programs on the market.

The Federal Housing Administration administers several refinance options. Borrowers can get a cash-out refinancing, although this option is typically geared toward those whose properties boast significant equity and rising market value.

A more common and popular approach is the FHA's streamline program, which has helped thousands of Americans refinance during the last 20 years.

The program has a few basic criteria:
  • You must have an FHA mortgage
  • You must be current on your mortgage
  • The refinance must lower the monthly principal and interest payments
  • You cannot receive cash

Some qualified borrowers can obtain no-cost refinances. In some cases, closing costs can be rolled into the cost of the refinance.

Borrowers can get a streamline loan without getting their home appraised, but remember that the refinance cannot be for more than the original loan.

This article was written by Brandon Laughridge of Mortgage Loan Place. Learn more about FHA Loan Requirements and FHA vs. Conventional Loans at MLP today!

If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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posted by Pac Res @ 3:12 PM   0 comments
Thursday, September 17, 2009
Capital gains and Equity Sharing - September 17, 2009
On this week's show we handle two interesting equity questions. The first is "You have a property that has substantial amounts of equity, you want to sell the property and move to another property, can the equity from Property A follow you to Property B without having to pay any capital gains? What other alternatives does this person have for using the equity?" Mortgages Made Simple logo

And the second question is "You've located a property that has lots of equity, you're intention is to take control of the property before someone else does. So you locate the listing agent, you team up with a money partner to fund the deal, you say to that person, hey I have a property under contract that has lots of equity. I need X amount of money to close the deal, would you like to be part of it? Would this be considered equity sharing or a deal structure for locating a private lender?"

The fist question is a capital gains tax question. Unfortunately, you can't transfer equity. But the tax law allows you to take up to a $250,000 capital gain without paying tax, $500,000 if married, on your primary residence. If the property is an investment property you can sell it and put the gain into a new property with no capital gains tax in a 1031 tax exchange.

The second question deals with an equity sharing type deal which were more common in the past but are almost unheard of today. Essentially you match up a borrower who doesn't have enough cash for a down payment with an investor who would like to share in the price appreciation of real estate without having to worry about tenants. In this case his tenants have an interest in the home so they have a reason to make the payments on time.

In today's environment lender guidelines are much stricter on where the down payment is coming from. This would more likely be a deal for a private lender, who is not as concerned with where the money is coming from just as long as it's there. If you wanted to structure this for conventional financing they would have to be co-borrowers but they must have some type of prior relationship. There is a website that matches up these types of people, but I'm not sure how or if they can obtain conventional financing.



If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

Please consult your tax adviser for tax advice.

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posted by Pac Res @ 10:00 AM   0 comments
Thursday, September 10, 2009
Non Recourse loans and Cash Out Refinances - September 10, 2009
What's the difference between a recourse and a non-recourse loan? and How much equity should one have in a property before considering a cash out refinance? This week Mortgages Made Simple logo we answer these two listener questions.

A recourse loan allows the lender to try to collect the money they lose on a foreclosure or short-sale from the homeowner in what's called a deficiency judgment. A non-recourse loan, on the other hand, doesn't allow the lender to collect any money on their loss. This is the most common type of residential loan.

A cash out refinance now requires a homeowner to have at least 20% equity depending upon certain loan characteristics. Jumbo loans, loans over $417,000, require more equity. The problem in the current lending environment, however, is if your credit scores are below 740 the rate is increased. So it might be better to contact a local bank for a 2nd in order to get a better interest rate.



If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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posted by Pac Res @ 10:00 AM   0 comments
Thursday, September 3, 2009
Pay off Your Mortgage Faster - September 3, 2009
This week we answer another listener question; "How does one know if they're paying just interest or they're paying down principal? Would their mortgage payment be just the interest or would it be substantially more? Mortgages Made Simple logoWho decides what gets applied to the mortgage payment once the interest has been calculated and figured out by the lender?

Mortgage loan payment schedules are based upon a formula that is heavily favored toward paying interest. Very little principal is paid during the first 10 years or so of a loan. An old rule of thumb is if you make 1 extra mortgage payment per year you will decrease your loan term by 8-9 years on a 30 year fixed rate loan. Try for yourself with the link below or email us and we'll help you out.



If you have any questions you would like us to answer on our show, please call our listener line at 714-519-7833 or email mortgagepodcast@gmail.com.

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