According to a recent article in the Los Angeles Times, mortgage interest rates are at their lowest levels in five weeks, and not surprisingly more people are seeking home loans.  This is can be seen as a positive sign that the value in homes are increasing slightly instead of homeowners being upside down on their mortgages.

This is both a positive and a negative for some homeowners.  On the positive side, this means they are able to refinance their homes at a lower rate and take advantage of equity in their homes.  But on the negative side, this assumes that the borrowers who are purchasing new homes still have good credit, can make at least a 20% down payment on residences with value of no more than $417,000.

Two important keys to this type of program:

• Loan amount available up to the maximum JUMBO FHA limit in your area
• FHA financing is for Everyone and not limited to first time homebuyers

FHA loans are guaranteed by the government and offer more flexible guidelines than traditional mortgages.  Some of these features are:

·         Down payment of 3.5%

·         Allows for lower credit scores

·         Cash out refinance transactions up to 85% of loan to value

·         No minimum or maximum income limits

When considering to refinance or purchase, a new property, the consumer must be prepared to present a complete financial package to their lender.  By having all the financial information available, this will allow your loan expert to find the correct loan program to fit your financial requirements.

The truth be told, paying someone to modify your loan is silly.  It’s not complicated and you can do it yourself.  The simplest route to changing the terms of your mortgage is to see if your mortgage has an option that will allow you to recast your mortgage.  A mortgage recast will allow you to make payments based on the balance that you have paid your mortgage down to.  This will only give you a lower payment if you have a fixed rate mortgage.  If you have paid your mortgage down and now are in need of a lower payment, a mortgage recast option could be your answer.  A lender will allow you to do this once in most cases for a fee.  The fee to recast your mortgage is usually anywhere from $250 – $500.  This is definitely cheaper than doing a whole new refi.

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