Southwest Florida Title Insurance & Real Estate Blog

Is your property under water?

Do you owe more than your property is worth?

If so, you might not have been able to take advantage of the historically low mortgage interest rates that exist in our market right now.

Most traditional home loan programs require an appraisal, which your lender uses to determine the value of your home and to determine whether that value makes it a safe bet for them to loan you money.  Very basically, if your home is worth less than you owe on it is essentially impossible to refinance your current loan.

This is of course a common problem here in Southwest Florida.

If you are currently in a FHA home loan and in this situation, there is a program that may help you take advantage of today’s great mortgage intersest rates.

It is called the FHA Streamline Refinance.

Just last week, we closed one of these loans for a couple who owed $240,000 on a FHA loan and who were paying about 5.5% interest on that loan.

Their home’s value was recently assessed by the property appraiser at $190,000 ($50,000 less than what they owed!), which in most cases would have made it impossible for them to refinance their home loan. Through the FHA Streamline Refinance program, these “under water” clients were able to refinance at a fixed rate of 3.75% over 30 years, which reduced their monthly payment of principal and interest from $1,363 to $1,109.49 – a savings of over $250 per month!

The FHA Streamline Refinance is a unique special provision. For starters, your existing loan must be a FHA loan.

According to mortgage expert Jay Beckingham, a loan officer at American Eagle Mortgage Company in Ft. Myers, Florida, FHA wants its borrowers to be able to take advantage of today’s low rates. The program therefore requires NO APPRAISAL, instead using the property’s purchase price as a baseline. The program does require that you pay your own closing costs; but the long-term savings are nonetheless clear and significant.

In the example above, those clients will save over $3,000 over the next 12 months.

Because we wanted to learn more about this program, we invited Jay to speak to us about it. Here is what Jay had to say —

If we can help you in anyway, please be sure to contact us online, or give us call at (239) 985-4142.

Also be sure to visit our free eBook Library to learn:

– Chris

This is the 7th tip of “10 Questions You Should Ask About Florida Short Sales” eBook, which is available as a FREE download.

FL Short sale lenders sometimes require cash contributions from short sellers in exchange for the lender’s agreement to approve the sale. The amount of cash demanded varies considerably and, as with Promissory Note requirements, depends very much on the FL short seller’s ability to make that sort of contribution and the amount of the loss the lender is absorbing.

We have seen as little as $250 and as much as $75,000. These amounts are ordinarily negotiable to the extent that the lender will negotiate.

Much like with Promissory Note requests, demands for cash contributions are more common when mortgage insurance is involved. If your loan has mortgage insurance, you should prepare to deal with this type of request.

If you would like to learn more about FL short sales and don’t feel like waiting for the next post, simply click the eBook icon on the right and download your FREE copy today!

If you have additional questions, please feel free to contact us online or call us at 239-985-4142.

-Chris