Thursday, June 30, 2016
Hong Kong's drawndown mortgage loans rise 45.8 pct in May vs April - Reuters
Hong Kong's drawndown mortgage loans rise 45.8 pct in May vs April - Reuters
welcome-to-summer-heres-how-to-get-your-second-home-mortgage
Buying A Second Home Might Be Your Smartest Move
Hotels are great, but they are certainly not a good investment.
Second homes, on the other hand, potentially yield a return while providing a vacation spot over which you have 100% control.
According to the Case-Shiller Home Price Index, home prices are up nationwide by more than 5% since last year. That means your vacation home might pay for your vacation.
And, you skip the booking hassles.
If you’ve grown weary of spending your summer in hotels and vacation rentals, consider joining the nearly one million buyers who purchased second homes last year.
But buying a vacation home is not a sure-fire win. And, it’s different than purchasing a primary residence. Here’s what you need to know before jumping in.
Click to see today’s rates (Jun 30th, 2016)
Understand Total Costs
Owning a second home comes with extra responsibility.
You’ll be maintaining two households, and that could be more expensive than you planned for. So plan carefully.
Affording the total cost is different than qualifying for the mortgage. Mortgage underwriters only look at expenses for principal, interest, property taxes, insurance, and, if applicable, HOA dues. If these expenditures check out, they approve your loan.
You must consider travel costs, regular maintenance, repairs, utilities, furnishings and household items.
You might offset some or even all of the costs if you rent your home part-time. But some loan programs don’t allow you to rent out a second home. You may also be able to write off your mortgage interest and property taxes to reduce overall cost.
Click to see today’s rates (Jun 30th, 2016)
Is A Rental The Same As A Vacation Home?
Rental homes and vacation properties are financed differently.
If you can qualify for your purchase without the property generating any income, buy it as a vacation home. You’ll get a better mortgage interest rate, and qualifying is more straightforward when rental income is off the table.
However, if you need to rent out your place to afford it, it becomes an investment property, not a second home.
In this case, your lender will want to see an appraisal with a comparable rental schedule. This document tells the underwriter the property’s potential income.
The lender counts 75 percent of the anticipated rents as income to you, and the monthly mortgage, taxes and insurance are added to your expenses when calculating your debt-to-income ratio (DTI).
Investment property mortgages almost always require at least 20 percent down because it’s very difficult to get mortgage insurance for these purchases. Investment property mortgage rates can be 50 basis points (0.50%) percent or higher than rates for primary residences.
Second Home Downpayment Requirement
You can buy a primary residence with just three percent down in many cases, but it takes at least ten percent down to buy a vacation home, and that’s if your application is very strong. Otherwise, your lender may require at least 20 percent.
If you don’t have a lot of cash on hand, you may be able to borrow your downpayment. The National Association of REALTORS® says that about one-fifth of buyers tap into equity from their primary residence to make the downpayment on the second home.
What about FHA or VA loans? Unfortunately, Uncle Sam has doesn’t back loans for anything but primary residences. However, if your seller has a government-backed loan against the property, you may be able to assume it.
Your loan of choice will probably be a conventional loan, offered by lenders nationwide, and underwritten by standards set out by Fannie Mae and Freddie Mac.
Click to see today’s rates (Jun 30th, 2016)
Qualifying For A Second Home Mortgage
Vacation property loans have only slightly higher rates than do primary residence mortgages.
As with your main home, it pays to shop aggressively for your best mortgage rate.
To make sure you qualify in the first place, assess your standing in the following areas.
Assets needed for a vacation home purchase
When you buy a vacation property, you’ll probably need reserves. Reserves are funds available to pay your mortgage if you experience an interruption in income.
You’ll need at least two months of reserves if you’re a well-qualified wage earner, and at least six months if you’re self-employed or have any weaknesses in your file.
One month of reserves is equal to the amount of money it would take to make one months’ payment on both your primary residence and future second home.
Credit score to buy a second home
Credit score requirements are slightly higher for second homes than for primary ones.
For example, Fannie Mae sets its minimum FICO at 620 for primary home purchase loans with at least 25 percent down and 640 for vacation homes with downpayments of 25 percent or more.
Income required for a second home
Debt-to-income requirements depend on the size of your downpayment and credit score. For example, Fannie Mae allows a DTI up to 45 percent with a 660 FICO and at least 25 percent down.
A 45% DTI simply means your total monthly payments add up to forty-five percent of your gross income.
For example, if you make $10,000 per month before taxes, your total payments including your primary residence, second home, auto loans, and other loans, equal $4,500.
Unlike investment properties, vacation homes have no rental income to offset the mortgage payment. You have to qualify with income coming from sources other than the property you are purchasing. If you wish to purchase a multi-unit vacation home, most lenders will treat it as investment property, whether or not you plan to rent it out.
Click to see today’s rates (Jun 30th, 2016)
Second Home: It’s Still A Business Deal
It is tempting to jump into a vacation home purchase, but first, weigh the benefits and costs.
Ensure that it makes long-term financial sense to buy. While there are upfront costs, a second home purchase can be a nice addition to your real estate portfolio or retirement plan.
To make ownership even more affordable, shop around for rates by calling at least three lenders. Most, if not all, lenders who offer primary residence loans also offer second home mortgages.
What Are Today’s Second Home Mortgage Rates?
Mortgage rates are ultra-low across the board, so vacation home loans are cheap right now as well.
Get a quote for your vacation home purchase. No social security number is required to start, and all quotes come with instant access to your live credit scores.
Click to see today’s rates (Jun 30th, 2016)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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Wednesday, June 29, 2016
Higher Ed Law Firm Takes on Bankruptcy Trustees in Tuition Battles
By
ENLARGE Photo: European Pressphoto Agency
The law firm that has bailed colleges and universities out of NCAA athletic-compliance trouble is getting dragged into the bankruptcy courtroom, where fights are increasingly breaking out over tuition payments.
The Bond, Schoeneck & King firm is representing several colleges that face demands to return tuition payments made by a student’s parents. That money, court-appointed bankruptcy officials argue, should have paid off the parents’ own bills.
The disputes have put repayment pressure on at least 49 colleges and universities, according to a Wall Street Journal tally. Skidmore College officials, for example, hired Bond lawyers to help them keep $87,807 that a Georgia mother paid for her daughter’s education at the private college in Saratoga Springs, N.Y.
Bond lawyers have worked for more than 100 colleges and universities that need help on matters such as complying with NCAA rulebooks, negotiating professor contracts and reading the fine print of grants. The firm is “stocked with former NCAA investigators,” according to a New York Times article published in 2007 that traced the niche to the academic fraud scandal at the University of Minnesota’s men’s basketball team.
“We do a tremendous amount of higher education work,” said lawyer Stephen Donato, who co-leads the firm’s bankruptcy practice.
But will the higher ed expertise help them in the tuition disputes?
The bankruptcy judge who is handling a lawsuit against Ithaca College, which was sued in January to return $95,727 for a Connecticut woman’s debts, made it clear that the work won’t be easy.
During a hearing last month, Ithaca College’s local lawyer had begun to raise the popular defense that society expects parents to pitch in for pricey schooling costs these days, but U.S. Bankruptcy Court Judge Ann Nevins cut them off.
“I’m not happy about these education cases, but there are plenty of folks who can’t afford to send their children to college, and there doesn’t seem to be a constitutional right to send your child to college, as much as some folks would like there to be,” she said during a hearing in U.S. Bankruptcy Court in Hartford, Conn.
In the courtroom, colleges face bankruptcy trustees who have the power to take back money that a bankrupt person spent several years before filing for protection if a trustee finds that the person didn’t get “reasonably equivalent value” for that expense. In the case of a child’s tuition payment, the filer didn’t get the value for the expenditure—the child did.
At least one other school called in a prominent law firm for help in this precinct. Johnson & Wales University hired the Wilmer Cutler Pickering Hale and Dorr law firm to defend the private, Rhode Island-based college in a lawsuit over $46,909 in tuition, which was paid by a Connecticut couple for their daughter’s education.
The hiring signals that colleges are ready for a fight—a shift from their usual strategy. Historically, colleges have opted to settle the disputes quietly using small law firms or their own in-house counsel.
But bankruptcy experts predict more of these lawsuits to come as college costs rise and more parents chip in to help their kids. Four judges who have written opinions on the issue were split, and several others have hinted that a fresh ruling is needed to clear up the rules.
Congress could beat the judges to it. Less than a week after The Wall Street Journal’s first report on the lawsuits, Rep. Chris Collins (R., N.Y.) introduced a bill that would block bankruptcy trustees from filing lawsuits against universities and college students to recover tuition money that had been paid years before.
Write to Katy Stech at katy.stech@wsj.com. Follow her on Twitter at @KatyStech
Higher Ed Law Firm Takes on Bankruptcy Trustees in Tuition Battles
What You Should Know About Asset Allocation
The purpose of this article is not to say that the concept of asset allocation is flawed or anything like that. The most important decisions in determining an investment portfolio are what asset classes to use and what percentages to put into each asset class. Diversifying your funds among different assets among different kinds of investments potentially reduces your overall risk because different investments should act differently at different times for different reasons. This is a very sound and accurate description of the investment world.
See Also: How to Build the Right Mix of Investments in Retirement
What I want to call your attention to when it comes to the idea of asset allocation is a commonly used—actually, misused—statistic. You have very likely seen somewhere in marketing materials out there that 93.6% of the investment returns you get are due to the asset allocation of your portfolio.
This is simply not true.
Why am I writing about it now? Because in the last couple of months I’ve seen this misconception, or misunderstanding, a couple of times in some marketing materials that have come my way, and I wanted to share with you what Paul Harvey would call “the rest of the story.”
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The basis for this misunderstood issue comes from a 1986 article in the Financial Analysts Journal, titled “Determinants of Portfolio Performance,” authored by Gary Brinson, L. Randolph Hood and Gilbert L. Beebower. The major tenant of the paper was that asset allocation mattered more than anything else—more important than even the specific stock or bond security selection or market timing.
The study looked at several specific pension funds over a specific time frame and reported on the variations in portfolio returns. It found the key driver of those returns was the choice of the asset classes used and the proportion that went into each asset class.
Here’s where things get a bit confusing, and it stems from how the investment industry decided to use this information. Having been in the industry for more than 30 years, I’ve seen it time and time again. The marketing material will state that 93.6% of the return of your portfolio will come from the asset allocation of that portfolio. They have extrapolated the results of the Brinson, Hood, Beebower study and asserted that it applies to any and all portfolios over any time period. However, that 93.6% came only from the specific pension plans studied for that specific time frame, not any other portfolio over some other time frame.
As the risk of being really picky here, this is where the marketing departments of the financial services companies have gone too far. It’s really simple to trot out the 93.6% number and make people think that the only key thing is asset allocation. Way too simple. And way too misleading. But it makes for great marketing material.
This comes full circle in an article published in March 2006 in Wealth Manager magazine, written by James Picerno, in which he interviewed Gary Brinson about his study results from twenty years before.
What did the author hope you would understand?
Summarizing the research, Mr. Brinson stated that deciding what asset classes to use and what percentages to use in those asset classes would have the biggest impact of the performance of the portfolios studied, and that those conclusions have stood the test of time.
Mr. Picerno then asked “Is there any particular misinterpretation or misuse that you find especially annoying?”
Mr. Brinson replied, “There’s one quote that I see periodically. Let’s say a portfolio had a return of, say, 10%, and someone will say, ‘93.6% of the return is due to asset allocation.’ That’s not true. That’s not what the paper said; that’s not the application of the paper. First of all, it didn’t apply to an individual portfolio; it applied on average to the portfolios we were examining. The number is an average number, not a number that applies to every single portfolio.”
Enough said?
So, please be aware of the misuse of the 93.6% statistic or any other percentage used in the same manner. If what you are reading or what is being presented to you is saying that the overwhelming percentage of investment returns is coming simply from asset allocation, know that the information is being misinterpreted or misused.
Take it from the author, Gary Brinson: this is not accurate. This is not a true statement. Be informed and be aware.
See Also: 7 Worst Mistakes Investors Will Make in This Market
Charles C. Scott, Accredited Investment Fiduciary®, has more than 30 years of experience in the financial services industry. “Our mission is to help our clients discover, design and live the life that they want to live by matching their finances with their visions, values and goals.”
This article was written by and presents the views of our contributing expert, not the Kiplinger editorial staff.
What You Should Know About Asset Allocation
Mortgage Loan Rates Slip Following Brexit Vote - 24/7 Wall St.
The Mortgage Bankers Association (MBA) released its report on mortgage applications Wednesday morning, noting a week-over-week decrease of 2.6% in the group’s seasonally adjusted composite index for the week ending June 24. Mortgage loan rates fell on three types of loans again this week.
On an unadjusted basis, the composite index decreased by 3% week over week. The seasonally adjusted purchase index also decreased by 3% compared with the week ended June 17. The unadjusted purchase index decreased by 4% for the week, and is now 13% higher year over year.
The MBA’s refinance index decreased by 2% week over week and the percentage of all new applications that were seeking refinancing rose from 57.7% to 58.1%.
Adjustable rate mortgage loans accounted for 5.9% of all applications, up from 5.7% in the previous week.
Last week’s vote in Britain to leave the European Union sent investors fleeing the equities market and turning to bonds (among other investments). When demand for bonds rises, bond yields decline, and when bond yields fall, mortgages tend to decline as well.
On Monday, Mortgage News Daily reported that 3.5% was the prevalent 30-year conventional rate being offered to top-tier borrowers, but that there were plenty of lenders offering 3.375% as well. According to the report, that was “the lowest stably-maintained rate we’ve ever recorded,” excluding some “scattered instances of 3.25% back in 2012.”
According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 3.76% to 3.75%, its lowest level since May 2013. The rate for a jumbo 30-year fixed-rate mortgage rose from 3.70% to 3.74%. The average interest rate for a 15-year fixed-rate mortgage decreased from 3.04% to 3.02%.
The contract interest rate for a 5/1 adjustable rate mortgage loan decreased from 2.92% to 2.88%. Rates on a 30-year FHA-backed fixed rate loan remained unchanged at 3.61%, the lowest level since May of 2013.
By Paul Ausick
Mortgage Loan Rates Slip Following Brexit Vote - 24/7 Wall St.
Tuesday, June 28, 2016
real-estate-professional-pays-it-forward
Oviedo Area Real Estate Professionals Pay It Forward with Heroes Home Advantage
OVIEDO, FLORIDA, USA, June 28, 2016 /EINPresswire.com/ — FOR IMMEDIATE RELEASE
Oviedo Area Real Estate Professionals Pay It Forward with Heroes Home Advantage
June 28, 2016 – Oviedo, FL – Heroes Home Advantage proudly announces that a group of real estate professionals in Seminole County, FL have joined their program. The real estate rebate program provides rebates, discounts and credits to local heroes who are purchasing or selling a home.
Heroes Home Advantage has teamed up with Realtor Carolyn Canada of Commercial, Homes & Land, Inc, loan officer Rayce Robinson of Fidelity Funding Mortgage, home inspector Jeff Wasch of A Buyers Choice Home Inspections, title agent Rendy Geiger of Cobblestone Title Services, LLC and home insurance agent John Hebert of Professional Property & Casualty. These partners have demonstrated their commitment to helping those who protect and enrich the lives of Seminole County residents.
Through the Heroes Home Advantage program, Realtors will donate 25% of their entire company’s commission in cash back or credit as allowable per the Realtor’s state, and lenders will provide closing credits as allowable per the lender’s state. Home insurance agents, title agents and home inspectors will also offer discounted rates or closing gifts to local heroes for each of their services, for a savings up to $5,000.
“Most real estate agents and others serving the real estate needs of the community provide very good service. However, we wanted to go beyond the ordinary. We wanted to give back to our heroes, whether it is our brave military, fire fighters, law enforcement, teachers or medical personnel; we believe they deserve extraordinary service and more!” Said Carolyn Canada, Commercial, Homes & Land, Inc. “It is pure joy to see the dreams of our heroes become reality, while saving them money at the same time! We are in this not to simply earn a paycheck, but to provide all that Heroes Home Advantage has to offer those who serve our community in such selfless ways. Heroes Home Advantage allows us the opportunity to give back, and we love that!”
The Heroes Home Advantage real estate rebate program is available for all members of the military, law enforcement, firefighters, first responders, health care professionals, and teachers. Anyone in those lines of profession is eligible, whether they currently or previously served their country.
For more information about Heroes Home Advantage, visit HeroesHomeAdvantage.com or email info@HeroesHomeAdvantage.com.
About Heroes Home Advantage
Heroes Home Advantage was founded in 2011 by Michele Ladd in Rochester NY. Ladd’s son Tommy, a United States Marine Corps combat veteran, completed two deployments to Iraq while her second son Tyler served in the United States Navy. Upon the two returning home safely, Michele decided to give back to local heroes and began reaching out to real estate professionals across the country to help her in her plight. Heroes Home Advantage is growing and is currently in 38 states with over 700 Realtors, lenders and vender partners. To date, the organization has helped America’s heroes save nearly $4,000,000 in credits, rebates and discounts to say “thank you for your services to our country and communities.”
Contact:
Carolyn M. Canada, Commercial, Homes & Land, Inc.
(407) 921-2496
Canada_c@bellsouth.net
Rayce Robinson, Fidelity Funding Mortgage – The Robinson Group (NMLS# 322615)
(321) 377-4211
mortgages@raycerobinson.com
Jeff Wasch, A Buyers Choice Home Inspections
(407) 878-9910
Jeff.wasch@abuyerschoice.com
Rendy Geiger, Cobblestone Title Services, LLC
(321) 377-6323
rendyg@cobblestonetitle.net
John Hebert, Professional Property & Casualty
(407) 366-7746
Jhebert@ppcfla.com
Carolyn M. Canada
Commercial, Homes & Land, Inc.
(407) 921-2496
email us here
real-estate-professional-pays-it-forward
if-i-lived-in-that-house-my-addiction-to-the-fantasy-of-online-real-estate
My friend Sarah was scrolling through listings of homes on the real estate app Zillow when she experienced the homebuyer’s equivalent of a meet-cute. There, in full-color photos, was her dream house. Acreage for fruit trees! Big bedrooms for all three kids! Giddy, Sarah called the listing agent, and five minutes after being let inside, she knew. This was it. Her house.
Except it wasn’t. Sarah already owns a house, a gut renovation job into which her husband has distilled 18 months of sweat equity. Which is why I’m calling her Sarah instead of her real name, because if her husband knew she was having an emotional affair with another property while he hammered roof shingles, he would not be pleased.
“Just to clarify,” I said, “you bought a house, but you’re still looking at Zillow?”
“Every day,” Sarah said. “I have the app on my phone.”
No judgment here. My pernicious Realtor.com habit has outlasted every home I’ve ever lived in, from the Maryland colonial that smelled like cigarette smoke to the Texas ranch house we sold for $1,000 less than we paid. We’re renting now, but it wouldn’t matter if we weren’t. I look at houses online when I own and when I rent, when I’ve just moved and when I’m pondering moving again. I wake up, open my laptop, check my email and Facebook, then click on Realtor.com.
As the tidy rows of homes populate my screen, I am a junkie getting a fix. My pulse quickens. I scroll fast through the photos, pausing at a kitchen’s Shaker cabinetry or a bathroom’s marble counters. Occasionally I text my husband a link. “I love this one,” I write. “So I bought it.”
I didn’t buy it. Of course not. I just look, intently and uncontrollably, drawn in by an omnipresent world of online real estate listings. The many sites that aggregate data from the Multiple Listing Service platform, including Realtor.com, Zillow, Trulia, Redfin, Estately, Homes.com, StreetEasy and Curbed make it possible for anyone to digitally stroll through a stranger’s home. You do not have to prequalify for a mortgage. You do not need a real estate agent. You just look.
We are, many of us, looking. Summer is peak relocation season, when 40% of American moves happen, and last July Zillow had 141 million unique users. Yet that same month, only about 5.4 million homes were purchased in the country, suggesting that some serious window shopping was going on. According to a 2014 survey by Discover Home Loans, two-thirds of home buyers admitted that looking at online property listings had become addicting.
Whatever is driving this obsession – restlessness? technology? the paradox of choice? – it hasn’t fueled the housing market. In 2015, homeownership rates hit a 48-year low. Millennials in particular are finding homeownership both undesirable – they don’t want to be tied down – and financially out of reach. And yet obsessing over real estate listings is often tinged by a fear of missing out. Oh, the homes not purchased! The lives not lived!
Because, in the end, Zillow is about the fantasy of living other lives. We look at online real estate for the same reason people binge-watch House Huntersor tour model homes they can’t afford – becausewhat would it be like to live in that place? Because wouldn’t our lives be vastly improved by a three-car garage and a kitchen island? Because, as the essayist Meghan Daum wrote: “Life would be better if I lived in that house.”
I’m relatively happy as a renter. For less than we’d pay for a mortgage, my family lives in a four-bedroom house. Lawn care is included. When our kitchen faucet leaks, the landlord sends a plumber. I love the ease of it, the way renting gives me permission to disengage from decisions about flooring and backsplashes. My place is enough.
Then Zillow tells me that there is a 5,200-square foot Craftsman with a granite-encrusted kitchen island, heart of pine floors, and a white beadboard mudroom for sale in my town. Never in my life will I have the $795,000 it takes to buy it, but that doesn’t keep me from clicking through all 118 photos on Zillow.
What happens next? Mostly misery.
Perusing other people’s real estate is a habit so soul-killing that one of the 10 commandments warned against coveting your neighbor’s house. We’re simply wired to think that the grass is always greener, and we suffer for it. In a 2015 Singaporean study, participants who were asked to compare their purchases with seemingly superior alternatives experienced a decline in happiness, regardless of how pleased they’d originally been. In effect, aspirational house photos make your builder’s grade cabinets seem like a personal failing, a comment not only on your home but on your career success, earning capabilities and life choices.
A few months ago, I decided to detox. I deleted the Zilllow app and blocked Realtor.com on my computer. As soon as I stopped wasting time clicking through photographs of strangers’ wood-paneled rec rooms, my self-loathing decreased. I felt more at peace.
If I’d managed to stop there, this would be an entirely different kind of story. But here’s the truth. Within a few weeks I started sneaking peeks at Zillow again. My inability to give it up seemed like a sign. Maybe it was time to buy again! My husband and I got a realtor and, one rainy afternoon, went to visit some of the homes I’d swooned over online.
What I remembered then is that digital real estate is, like any other social media representation, a carefully crafted fiction. Wear and tear doesn’t exist in Zillowland. It’s Photoshopped and filtered and sponged away. In person, a bay window, beautiful in the photos, was too crooked to close. A hardwood floor was so slanted you could roll a marble down it. After that day, my desire to buy began ebbing, replaced by gratitude for all the ways my rental wasn’t falling apart.
I still look at real estate websites every day, but I look with the understanding that I’m perusing a dreamscape. That any house I’m able to buy will almost certainly disappoint me. That in reality, the perfect house is not for sale. It exists only online.
I look at these places, and I lust a little, and then I make toast in my builder’s grade kitchen.
if-i-lived-in-that-house-my-addiction-to-the-fantasy-of-online-real-estate
Consumer Staples Could Offer Relief From Brexit (KO, PG)
Defensive sectors have gained ground since the Brexit referendum, with investors seeking safety over growth. Utilities, bonds and precious metals have all benefited from this rotation, which may continue through the 3rd quarter. Other high yielders including consumer staples have run in place or lost a little ground during this period but could play catch up in coming weeks.
Modern investors show little patience with consumer staples because they believe returns will be low and slow to accumulate, in line with the sector’s sleepy reputation. However, these stocks can trend quickly in periods of market stress like the one we entered last week. As a result, it makes sense to give these securities a closer look, with an eye toward profitable entry levels.
SPDR Select Sector Consumer Staples ETF (XLP) pays a 2.37% dividend and manages a portfolio of 43 food and household product stocks, with Proctor & Gamble Co. (PG) and Coca-Cola Co. (KO) the two largest holdings. The fund also carries a basket of cyclical exposure that includes Wal-Mart Stores Inc (WMT) and Costco Wholesale Corp. (COST), with both securities more vulnerable to economic fluctuations than the majority of recession-resistant components.
The fund has been engaged in a major uptrend since 2009, grinding out a rising channel that stalled in August 2015 just above 50. A selloff to a 10-month low got bought, yielding a bounce to resistance in October. It tested that level into February of this year and broke out, triggering a rally burst to 53.77. It then eased into a shallow channel that’s rewarded neither shorts nor longs. A rally above 55 will be needed to break this pattern and establish a more dynamic uptrend.
Proctor & Gamble pays a 3.26% dividend. It broke out above the 2007 high at 75.18 in 2013 and entered an uptrend that spent the next 1½ years grinding sideways on top of new support. It broke out in November 2014 and posted an all-time high just one month later at 93.89. It then sold off in a January 2015 breakaway gap, followed by a steep decline that bottomed out in August at a 3-year low.
The subsequent bounce stalled at the .618 Fibonacci retracement level in March, yielding 3 months of support testing at the 200-day EMA. The stock sold off after Brexit but is holding range support near 79 and could post a higher low in coming days. A breakout above 84 will target the unfilled January 2015 gap, which has aligned tightly with the .786 retracement. This predicts back-and-fill type price action that attracts strong-handed buyers above 90.
Coca-Cola pays a 3.19% dividend. It topped out at 44.47 in 1998 after a powerful uptrend and sold off to 18.72 during the 2008 to 2009 bear market. It rallied within a point of the multi-decade high in 2013 and dropped into a sideways pattern that finally reached resistance in October 2014. A breakout attempt failed, yielding a decline that posted a 2-year low in August, followed by a recovery wave that reached resistance for the 2nd time in March.
Price action since that time has ground out a triangle pattern across the breakout level, marked by lower highs and higher lows off the April 2016 low. The stock dropped into the 200-day EMA this week after gapping down on Friday. While European sales should stay resilient in coming months, the decline points to anxiety about the strengthening U.S. dollar and its impact on profits. Even so, it’s impossible to ignore the 18-year cup and handle pattern because a breakout could lift the stock into the 60s or 70s.
The Bottom Line
High yielding consumer staples stocks have underperformed other defensive sectors since the Brexit referendum but it’s still early in the game and market players could soon add these traditionally defensive stocks to their portfolios, triggering a game of catch up with bonds, utilities and precious metals.
Consumer Staples Could Offer Relief From Brexit (KO, PG)
Brexit Drops Mortgage Rates to Historic Lows - Zing! Blog by Quicken Loans (blog)
Last week, the United Kingdom voted to leave its place in the European Union. Because of Thursday’s Brexit vote, we anticipated mortgage rates could drop to historic lows. Today we can confirm mortgage rates dropped about one-eighth of a point after the financial commotion overseas. With interest rates already at three-year lows, this affords to you a great opportunity to refinance or purchase a home.
Brexit has created aftershocks to the global economy, many of which we have witnessed over the weekend and will likely continue to see. The stock market took a major hit, the pound depreciated in value and investors are moving their money to alternative opportunities.
Why This Vote Made Mortgage Interest Rates Go Down
Why would a vote across the Atlantic impact you or anyone else in the U.S?
Well, we are part of the global economy. This means shocks in other areas of the world can affect us – and they do – a lot more than they did 30 years ago. A vote in the UK – a big one like leaving the European Union – has created uncertainty among investors, as they don’t know what the coming weeks and months will look like. Because of this uncertainty, investors want to find more stable, safer investment opportunities. Instead of keeping their money in the stock market (which went down a lot on Friday), they might put their money in government bonds or mortgage-backed securities (MBS), among other options.
One relatively safe investment is an MBS, which are oftentimes fully backed or sponsored by the government. Because of this, they offer lower interest rates for investors, but are more predictable and less risky than the stock market. Investors put their money in MBS’s, which are then lent to mortgage companies who lend it to you, so you can purchase or refinance your home. Because all of these investors are putting their money into MBS’s, there is a greater supply of money to lend to you. Thanks to the theory of supply and demand, as the supply of money goes up, interest rates go down. This is a beautiful thing, because you get a lower interest rate on your mortgage.
Opportunity and Urgency
The easiest way to take advantage of this opportunity is to use Rocket Mortgage by Quicken Loans. Rocket Mortgage is completely online and gives you an intelligent, customizable mortgage solution based on today’s rates.
This is a great opportunity for those in the market for a mortgage. Because of lower interest rates, you can potentially save thousands of dollars over the life of your loan. We cannot predict how long these low rates will last, so consider locking in your mortgage rate today while they are still at near record lows.
Related Posts
Brexit Drops Mortgage Rates to Historic Lows - Zing! Blog by Quicken Loans (blog)
Monday, June 27, 2016
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NOTE: Fed Chair Yellen was scheduled to participate in a “Policy Panel” at the ECB Forum on Central Banking in Portugal on Wednesday. She has cancelled. Mark Carney, Governor of the Bank of England and Chairman of the G20’s Financial Stability Board, has also cancelled.
Tuesday:
• At 8:30 AM ET, Gross Domestic Product, 1st quarter 2016 (Third estimate). The consensus is that real GDP increased 1.0% annualized in Q1, revised up from a 0.8% increase.
• At 9:00 AM, S&P/Case-Shiller House Price Index for April. Although this is the April report, it is really a 3 month average of February, March and April prices. The consensus is for a 5.5% year-over-year increase in the Comp 20 index for April. The Zillow forecast is for the National Index to increase 5.1% year-over-year in April.
• At 10:00 AM, Richmond Fed Survey of Manufacturing Activity for June. This is the last of the regional Fed surveys for June.
From Tim Duy: Fed Once Again Overtaken By Events
With global financial markets reeling in the wake of Brexit – Britain’s unforced error as a political gamble went too far – the Fed is back on the sidelines. A July hike was already out of the question before Brexit, while September was never more than tenuous, depending on the data falling in place just right. Now September has moved from tenuous to “what are you thinking?” …
…
Bottom Line. The Fed will stand down for the moment; where they go down the road depends upon the depth and length of current disruption. I think at this point it goes without saying that if you hear a Fed speaker talking about July being on the table or confidently warning about two or three rate hikes this year, you should ignore them. Perhaps we can have that conversation later with regards to the December meeting, but certainly not now. …
tuesday-gdp-case-shiller-house-prices
Why 'jumbo' mortgages are now a better deal than smaller home loans - Boston.com
It’s true but a bit counterintuitive. Banks will give you a better interest rate if you buy a more expensive and presumably bigger home.
The interest rate on a 30-year jumbo loan – anything above $523,250 in the Boston area – stands at 3.71 percent.
That’s a notch below the rate for a “conforming” mortgage – anything below that number – which weighs in at 3.73 percent, noted Greg McBride, senior vice president and chief financial analyst for Bankrate.
The lower rate on jumbo mortgages is a reversal from the typical trend over the years, in which banks have charged higher interest rates for larger loans on the theory that they are inherently riskier, he said.
The two rates “have gradually compressed over a couple of years,” McBride noted. “About 12 months ago, they flipped.”
“It’s a good time to get a jumbo mortgage,” he added.
Jumbo rates spiked during the Great Recession, rising to more than 1.5 percentage points higher than conventional, conforming loans before settling out one percentage point higher around 2011, according to HSH.
Nor is it just size that gave jumbos their reputation as being a little riskier. While smaller, conforming loans are backed by federal mortgage giants Fannie Mae and Freddie Mac, jumbos aren’t.
But things have changed.
First, conforming loans have become relatively more expensive now for banks to offer, forcing them to charge somewhat higher rates, compared to jumbos.
However, an even bigger change has been an important realization by bankers: While jumbo loans may be bigger, the more affluent home buyers who are taking out jumbos are actually better bets overall, with lower default rates.
In fact, these are the very customers banks are now chasing after, scrambling to offer services like wealth management to tap into other assets they might have.
“Jumbo mortgage borrowers have proven to be not only a very good credit risk, but very good business,” McBride said. “Lenders have been competing very actively for that business and that has benefited jumbo borrowers from a pricing standpoint.”
Why 'jumbo' mortgages are now a better deal than smaller home loans - Boston.com
when-can-i-refinance-my-mortgage
You Can Refinance A Mortgage At Any Time
As a homeowner with a mortgage, it’s your right to “replace” your mortgage financing at any time.
There are a number of reasons why you might want to get new financing.
Maybe mortgage rates have dropped and the rate you’re currently paying is higher than today’s mortgage rates. Or, maybe your home equity has increased and you want to take cash out for home improvements or other causes.
You might even want to switch your mortgage from a 30-year fixed-rate mortgage to something shorter such as a 15-year fixed-rate mortgage; or, to an adjustable-rate mortgage instead.
When you replace your mortgage financing, it’s known as a home loan refinance.
You can ask for a refinance at any time, and you can work with any mortgage lender in the county — not just your current one.
Click to see today’s rates (Jun 27th, 2016)
What Are Your Refinance Options?
Homeowners have a multitude of refinance options. The path you choose should depend on the reason why you’re refinancing.
In general, refinances can be grouped into three categories.
The “rate and term” refinance is meant to replace your existing mortgage with a new loan of lower mortgage rate, different term, or both.
With a rate-and-term refinance, the starting balance of the new loan is similar to the existing balance of the loan being replaced. Refinance fees are paid by you as cash; or, are paid by the lender using a low-closing cost refinance.
The “limited cash out” refinance is very similar to the rate-and-term refinance, except that closing costs are added to your loan balance. Your starting mortgage balance, therefore, approximates your existing loan balance plus whatever costs are incurred as part of the transaction.
Lastly, there’s the “cash out refinance”.
With a cash-out refinance, the lender converts a portion of your home equity into cash, which it hands to at closing.
In a cash-out refinance transaction, your new starting mortgage balance is equal to your existing loan balance plus your refinance costs, plus whatever extra cash you’ve requested from your available home equity.
Click to see today’s rates (Jun 27th, 2016)
Reduced Paperwork Refinancing: The Streamline Refinance
For certain homeowners, there is a fourth refinance option.
Known as a “streamline refinance”, it’s a low-documentation, reduced-paperwork refinance which can often close in half the time as a regular refinance.
Streamline refinances are restricted by mortgage type:
- FHA Streamline Refinance: Available to homeowners with existing FHA mortgages
- VA Streamline Refinance: Available to homeowners with existing VA mortgages
- USDA Streamline Refinance: Available to homeowners with existing USDA mortgages
In general, streamline refinance loans don’t require home appraisals to be performed and, many times, they waive the typical income and asset verifications required by a standard rate-and-term refinance.
Streamline refinances are restricted to rate-and-term and limited cash out. You may not do a cash out refinance via a streamline refinance loan.
Click to see today’s rates (Jun 27th, 2016)
How Do You Apply For A Mortgage Refinance?
Applying for a mortgage refinance is similar to applying for a “purchase” mortgage loan — shop for low rates among multiple lenders, then select the lender with which you want to work.
Always shop between two or more lenders when you’re shopping for a mortgage rate.
With only a few exceptions, as part of your refinance, you’ll be asked to re-verify your income, your assets, your employment, and any changes in your credit history.
For example, in order to document income, you’ll be asked to show recent pay stubs and W-2s for the prior two years; and, you may be asked to show your two most recent years of federal tax returns.
Self-employed borrowers may be asked to show additional proof of income.
To document assets, you’ll be asked to show the two most recent statements from all of your checking and savings accounts; and, from your retirement accounts, if you have any.
Employment will be verified with a phone call to your employer; and, your credit history will be checked using a recent copy of your credit report.
You’ll be asked to explain any changes to your credit history, including new patterns of missed payments or delinquencies; new accounts opened and not yet reporting; and, new judgments or liens filed against you.
You won’t be asked to fund a down payment, because you already own your home. However, you might be asked to document from which bank account(s) you’ve been paying your mortgage.
There is very little paperwork you will be asked to provide as part of a mortgage loan refinance that you weren’t asked to provide with your original purchase mortgage loan.
Click to see today’s rates (Jun 27th, 2016)
How Do You Get Approved For A Mortgage Refinance?
The mortgage underwriting process is mostly an automated process, making using of software known as an Automated Underwriting System (AUS).
The AUS is a program which performs several tasks, such as calculating a borrower’s debt-to-income ratio and pulling a current credit report fro the credit bureaus, then passes judgment on a borrower’s request for a mortgage approval.
The three decisions made by an AUS are Approve, Refer, and Refer with Caution.
An “approve” recommendation means that your request for a loan can be approved provided that specific additional paperwork can be provided. This paperwork may include the completion of a home appraisal which certifies the home’s current value; or, an additional month’s worth of pay stubs.
Ratings of “refer” and “refer with caution” mean that your loan cannot be approved, as submitted.
Refer ratings typically mean that additional information is needed to make a decision. Loans can be resubmitted for approval after additional documentation is received.
Loans which are refer with caution typically can’t be approved.
Since late-2015, with the U.S. economy improving and with lenders loosening their mortgage approval standards, more than 64% of refinance applications are getting all the way through to closing.
What Are Today’s Mortgage Rates?
There are reasons to refinance when mortgage rates are falling; and reasons to refinance when mortgage rates are rising, as well. Be sure to shop around to find your best terms.
Get today’s live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.
Click to see today’s rates (Jun 27th, 2016)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
when-can-i-refinance-my-mortgage
Some Mortgage Lenders Fail To Follow New Rules - Palm Beach Post
The Consumer Financial Protection Bureau (CFPB) has released a new report that states a number of mortgage servicers have failed to follow the guidelines that were put in place following the housing crisis to protect borrowers and lenders alike. These new rules have been in place since early 2014, and while many lenders have followed them as required, some actually give homeowners information that is wrong or fail to give them any of the required details. These errors and lack of information are often blamed on the lack of technology.
The results came after a number of loan servicer investigations the CFPB began in January 2014 and continued up through April 2016. The results show that the information borrowers received about their loan modifications was at times late, wrong, or deceptive in some manner. The report also showed that borrows often felt that they were not getting a straight answer from customer service, especially when loans were transferred from one servicer to another.
One particular issue is the compatibility of databases and other programs. Borrowers often found that their new loan servicer was unable to pull up their full file due to such an incompatibility.
Richard Cordray, Director of the CFPB, stated that these servicers needed to stop hiding behind outdated systems and incompatible technology. They must “step up and make the investments necessary to do their jobs properly and legally,” Cordray stated.
Some Mortgage Lenders Fail To Follow New Rules - Palm Beach Post
Friday, June 24, 2016
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This press release does not constitute an offer to sell or the solicitation of an offer to buy securities of Fannie Mae. Nothing in this press release constitutes advice on the merits of buying or selling a particular investment. Any investment decision as to any purchase of securities referred to herein must be made solely on the basis of information contained in Fannie Mae’s applicable Offering Circular, and no reliance may be placed on the completeness or accuracy of the information contained in this press release.
You should not deal in securities unless you understand their nature and the extent of your exposure to risk. You should be satisfied that they are suitable for you in light of your circumstances and financial position. If you are in any doubt you should consult an appropriately qualified financial advisor.
Benchmark Notes is a registered mark of Fannie Mae. Unauthorized use of this mark is prohibited.
Fannie Mae enables people to buy, refinance, or rent homes.
Visit us at: http://www.fanniemae.com/progress
Follow us on Twitter: http://twitter.com/FannieMae
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zillow-fannie-mae-brexit-vote-will-likely-lower-mortgage-rates
Some experts say that the Brexit vote could result in U.S. interest rates falling even lower.
Previously, the fed had predicted that it would be raising rates possibly even as soon as July, however that may not be an option anymore. In fact, before the Brexit decision, Janet Yellen, chair of the Board of Governors, indicated that a rate hike was not out of the question, and may still be on the horizon.
“The reaction in the Foreign Exchange markets has been as forecast in the event of an exit, a shift to the advantage of the dollar,” Fannie Mae Chief Economist Doug Duncan said. “U.S. treasury rates have fallen as capital markets participants have moved toward safety. This will likely lower mortgage rates as well in the short term.”
“What should we expect for the U.S. economy, monetary policy, and the real estate and mortgage markets?” Duncan said. “This already seems to have raised the degree of uncertainty in the minds of the business community regarding future economic policy and prospects.”
“This uncertainty, which is different than any individual candidate’s proposed economic policy, may dampen already weak capital investment activity and the most recent employment data have already registered a slowdown in hiring,” Duncan said. “Consumers who have recently showed some strength in consumption spending and in housing in spite of their continued pessimism about the direction of the US economy will be key to keeping a ‘tepid at best’ economy moving ahead.”
And he wasn’t the only one to make this prediction.
“We expect mortgage rates to reach historic lows in the wake of the Brexit vote, as investors flock to relatively safer investments in U.S. mortgage-backed securities,” said Erin Lantz, Zillow vice president of mortgages.
“The vote may also delay future federal funds rate hikes as the Fed assesses the degree of political and economic uncertainty that the vote introduced to global markets,” Lantz said. “Consumers worried about buying or refinancing before rates rise will now have more time to take advantage of this historically low rate environment.”
Some experts even encourage buyers to jump on these rates, saying that these low rates won’t last.
“Mortgage rates will tumble following the Brexit vote, possibly hitting new record lows,” Bankrate.com Chief Financial Analyst Greg McBride said. “If you’re a borrower, don’t wait to lock your rate as this opportunity may not last long.”
Many investors are betting that by February 2017, rates will be where they are today, according to an article by Chris Matthews for Fortune.
“It is not difficult to see parallels between the sentiment of U.K. voters and the sentiment of voters in the U.S. presidential election,” Duncan said.
Here’s what the presidential candidates have to say about the Brexit vote:
Just arrived in Scotland. Place is going wild over the vote. They took their country back, just like we will take America back. No games!
— Donald J. Trump (@realDonaldTrump) June 24, 2016
While Scotland was taken out because of the U.K.’s vote, it was actually one of the few areas that very strongly voted in, but you know, minor details.
“This time of uncertainty only underscores the need for calm, steady, experienced leadership in the White House.” —Hillary #BrexitVote
— Hillary Clinton (@HillaryClinton) June 24, 2016
That being said, many agree that this vote will not have a major effect on the economy, and say that it could be years before the decision takes effect, therefore shielding the housing market from seeing any changes.
Although interest rates may go down, ValueInsured CEO Joe Melendez warns against jumping into the market, and the effects the rates could have on home prices.
“I definitely don’t expect Yellen to raise rates at this point given the uncertainty and even if the Fed does, we will still be at historic lows,” Melendez said. “That said regardless of the changes in rates housing will be affected.”
“If rates remain low, it will fuel even higher demand, which risks overinflated prices in a market that many are already saying is too high,” he said. “And yet if rates go up, elastically home prices will start to come down, which is good for future buyers but not great for those buying today.”
“In either situation, people should carefully evaluate all options available to modern homebuyers that can protect their investments,” Melendez concluded. “Like a 401K, unless they plan to commit to a single home for 30 years, they should expect some ups and downs especially in the near term.”
zillow-fannie-mae-brexit-vote-will-likely-lower-mortgage-rates
what-is-a-mortgage-refinance-in-plain-english
How Does Refinancing Work
Refinancing works by giving a homeowner access to a new mortgage loan which replaces its existing one. The details of the new mortgage loan can be customized by the homeowner, include the new loan’s mortgage rate, loan length in years, and amount borrowed. Refinances can be used to reduce a homeowner’s monthly mortgage payment; to take cash out for home improvements; and, to cancel mortgage insurance premiums, among other uses.
What Is A Mortgage Refinance?
A mortgage is a loan used for real estate. They’re available via banks, credit unions, and online lenders. Hundreds of billions of dollars worth of mortgage loans are given each year.
But, mortgages aren’t one-size-fits-all. Mortgages can be customized.
For example, you can choose the number of years in your loan (i.e. term); you can choose the nature of your interest rate (i.e. fixed-rate or adjustable-rate); and, you can even choose what you pay in mortgage closing costs.
Your needs as a homeowner today, though,may be different from your needs tomorrow. In the future, you may not like mortgage terms you created for yourself.
Thankfully, there’s an option to change your mortgage loan terms. It’s known as a “refinance”.
To refinance your home means to replace your current mortgage loan with a new one. Refinances are common whether current mortgage rates are rising or falling; and you can get one from any bank you choose.
You’re not limited to working with your current mortgage lender.
Some of the reasons homeowners refinance include a desire to get a lower mortgage rate; to pay their home off more quickly; or, to use their home equity for paying credit cards or funding home improvement.
Refinances typically close more quickly than a purchase mortgage loan and can require far less paperwork.
Click to see today’s rates (Jun 24th, 2016)
3 Types Of Refinance Mortgages
Refinance mortgages come in three varieties — rate-and-term, cash-out, and cash-in. The refinance type that’s best for you will depend on your individual circumstance.
Refinance mortgage rates vary between the three types.
Rate-And-Term Refinance
In a rate-and-term refinance, the only terms of the new loan which differ from the original one are either the mortgage rate, the loan term, or both.
Loan term is the length of the mortgage.
For example, in a rate-and-term refinance, a homeowner may refinance from a 30-year fixed rate mortgage into a 15-year fixed rate mortgage; or, may refinance from a 30-year fixed rate mortgage at 6 percent mortgage rate to a new, 30-year mortgage rate at 4 percent.
With a rate-and-term refinance, a refinancing homeowner may walk away from closing with some cash, but not more than $2,000 in cash.
“No cash out” refinance mortgages allow for closing costs to be added to the loan balance, so that the homeowner doesn’t have to pay costs out-of-pocket.
Most refinances are rate-and-term refinances — especially in a falling mortgage rate environment.
Cash-Out Refinance
In a cash-out refinance, the refinance mortgage may optionally feature a lower mortgage rate than the original home loan; or shorter loan term, such as moving from a 30-year mortgage to a 15-year mortgage.
However, the defining characteristic of a cash-out mortgage is an increase in the amount that’s borrowed.
With a cash-out refinance, the loan balance of the new mortgage exceeds than the original mortgage balance by five percent or more.
Because the homeowners only owes the original amount to the bank, the “extra” amount is paid as cash at closing, or, in the case of a debt consolidation refinance, directed to creditors such as credit card companies and student loan administrators.
Cash-out mortgages can also be used to consolidate first and second mortgages when the second mortgage was not taken at the time of purchase.
Cash-out mortgages represent more risk to a bank than a rate-and-term refinance mortgage and, as such, carry more strict approval standards.
For example, a cash-out refinance may be limited to a lower loan size as compared to a rate-and-term refinance; or, may require higher credit scores at the time of application.
Most mortgage lenders will limit the amount of “cash out” in a cash-out refinance mortgage to $250,000.
Cash-In Refinance
Cash-in refinance mortgages are the opposite of the cash-out refinance.
With a cash-in refinance, a refinancing homeowner brings cash to closing in order to pay down the loan balance and the amount owed to the bank.
The cash-in mortgage refinance may result in a lower mortgage rate, a shorter loan term, or both.
There are several reasons why homeowners opt for cash-in refinance mortgages.
The most common reason to do a cash-in refinance to get access to lower mortgage rates which are only available at lower loan-to-values. Refinance mortgage rates are often lower at 75% LTV, for example, as compared to 80% LTV.
Another common reason to cash-in refinance is to cancel mortgage insurance premium (MIP) payments. When you pay down your loan to 80% LTV or lower on a conventional loan, your mortgage insurance premiums are no longer due.
Click to see today’s rates (Jun 24th, 2016)
Refinances Require Paperwork (But Not So Much)
When you do a mortgage refinance, you are establishing a brand-new loan with brand-new terms. Typically, this subjects a refinance applicant to the same mortgage approval process as with a purchase mortgage applicant.
In other words, the refinance applicant is evaluated in three specific areas:
- Credit Score and Payment History
- Income and Employment History
- Retirement Assets and Cash Reserves
Furthermore, also like a purchase, the home being refinanced is subject to a home appraisal in order to affirm its current market value.
Despite the similarities, though, borrowers can usually expect to provide less documentation for a refinance mortgage as compared to a purchase.
You will still be asked to provide proof of income using W-2s and pay stubs; proof of assets via bank statements; and proof of citizenship or U.S. residency status. But, you will not be asked to provide information related to the original transfer of the home.
Refinance mortgages are often ready to “close” in 30 days or fewer.
Click to see today’s rates (Jun 24th, 2016)
Some Refinances Don’t Require Verifications
Refinance mortgages typically require the verification of a borrower’s income, assets, and credit. However, there are certain refinance programs for which verifications can be bypassed.
These programs are called “streamlined” refinances. They’re called streamlined refinances because their underwriting requirements are grossly simplified and designed to be speedy.
With a streamline refinance, mortgage lenders waive large parts of their “typical” refinance mortgage approval process. Often, home appraisals are waived, income verifications are waived, and credit scores verifications are waived.
Different lenders may deploy different overlays for each of the streamlined programs, but the programs can be summarized as follows.
The FHA Streamline Refinance
The FHA Streamline Refinance is available to homeowners with an existing FHA mortgage. The FHA Streamline Refinance program waives all verifications and refinance mortgage rates are as low as with a standard-verification FHA-backed loan.
The FHA Streamline Refinance requires refinancing homeowners to save five percent or more on their mortgage payment; and, to show a history of on-time payments to their lender.
Cash-out refinance mortgages are not allowed via the FHA Streamline Refinance program.
The VA Streamline Refinance
The VA Streamline Refinance is available to homeowners with an existing VA-backed mortgage.
Officially known as the VA Interest Rate Reduction Refinancing Loan (IRRRL), the VA Streamline Refinance also waives income, asset, and credit score verifications.
Refinancing VA homeowners are required to demonstrate that the refinance mortgage will result in monthly payment savings, except for homeowners changing to a shorter loan term, such as from a 30-year mortgage to a 15-year mortgage; or, from an ARM to a fixed-rate loan.
Homeowners may not receive cash-out as part of a VA Streamline Refinance.
The HARP Loan
The HARP loan is a government-backed refinance program good through December 31, 2016. Its official name is the Home Affordable Refinance Program.
HARP is the Fannie Mae/Freddie Mac-equivalent of the FHA Streamline Refinance or VA Streamline Refinance. It’s a streamline refinance for conventional home loans.
In order to qualify for a HARP loan, homeowners must a have a mortgage backed by Fannie Mae or Freddie Mac which predates June 2009; must show a 6-month history of on-time payments; and, may not have already used the HARP loan to refinance.
HARP loans do not allow cash-out to the homeowners. Rate-and-term refinance mortgages only.
USDA Streamline Refinance Program
The USDA Streamline Refinance Program is available to homeowners with existing USDA home loans. USDA loans are loans for homeowners in rural or suburban areas which allow for up to 100% financing.
The USDA Streamline Refinance Program does not verify income, assets or credit; and, homeowners using the program to refinance are limited to 30-year fixed rate mortgages and 15-year loans. ARMs are not allowed.
Cash-out refinance mortgages are not allowed via the USDA Streamline Refinance.
What Are Today’s Mortgage Rates
There are many ways to refinance a home and millions of U.S. homeowners are potential eligible for lower rates and payments.
Get today’s live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.
Click to see today’s rates (Jun 24th, 2016)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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