The Home Affordable Refinance Program (HARP) is a refinance option created by the federal government to aid the millions of homeowners that
are "underwater," meaning they owe more on their home than their home is worth. The original HARP launched in 2009 allowed borrowers to
refinance their home up to a 125% LTV ratio as long as the mortgage was purchased by Fannie Mae or Freddie Mac prior to May 31st, 2009. The
new HARP 2.0 removed the LTV limitation allowing borrowers with LTV ratios above 125% the opportunity to refinance and secure lower interest
rates. HARP 2.0 frequently waives the appraisal requirement relieving borrowers from additional fees. Loans with LTV ratios above 80% require
mortgage insurance. Depending on the terms of your existing loan, HARP guidelines often waive the costly mortgage insurance fees and
premium requirement regardless of the LTV ratio of the proposed loan.
In order to refinance through HARP 2.0, you must not have previously refinanced under either HARP 2.0 or HARP. Borrowers must be current on all
mortgage payments and have made no late payments within six months prior to HARP application and no more than one late payment within
12 months of HARP application. By definition, late payments are those which have been overdue for more than 30 days. Credit, debt-to-income
ratio, employment history, and other qualifying factors will be looked at by each individual lender and approved according to their company's
guidelines for the HARP 2.0 program.
If you don't qualify under HARP guidellines, there are other methods to refinancing an underwater mortgage that could still save you money
each month.
Links:
are "underwater," meaning they owe more on their home than their home is worth. The original HARP launched in 2009 allowed borrowers to
refinance their home up to a 125% LTV ratio as long as the mortgage was purchased by Fannie Mae or Freddie Mac prior to May 31st, 2009. The
new HARP 2.0 removed the LTV limitation allowing borrowers with LTV ratios above 125% the opportunity to refinance and secure lower interest
rates. HARP 2.0 frequently waives the appraisal requirement relieving borrowers from additional fees. Loans with LTV ratios above 80% require
mortgage insurance. Depending on the terms of your existing loan, HARP guidelines often waive the costly mortgage insurance fees and
premium requirement regardless of the LTV ratio of the proposed loan.
In order to refinance through HARP 2.0, you must not have previously refinanced under either HARP 2.0 or HARP. Borrowers must be current on all
mortgage payments and have made no late payments within six months prior to HARP application and no more than one late payment within
12 months of HARP application. By definition, late payments are those which have been overdue for more than 30 days. Credit, debt-to-income
ratio, employment history, and other qualifying factors will be looked at by each individual lender and approved according to their company's
guidelines for the HARP 2.0 program.
If you don't qualify under HARP guidellines, there are other methods to refinancing an underwater mortgage that could still save you money
each month.
Links:
A VA mortgage loan is a specialized loan type provided exclusively to veterans of the US Armed Services. These loans are backed and
guaranteed by the Department of Veteran Affairs (VA) and offer highly beneficial financial advantages to veterans who issued by federally
qualified lenders and are guaranteed by the U.S. Veterans Administration, designed to offer long-term financing to American veterans. VA loans if
they are VA-approved; for properties of this type not already approved, borrowers may fill out forms to submit to the VA to find out whether the
property will qualify. In terms of manufactured homes, some may be eligible for financing if they are classified and taxed as real estate and
affixed to a permanent location and foundation. In addition, manufactured homes must conform to building codes and zoning requirements.
guidelines and may not offer VA loans for all types of property.
VA "entitlement" is a representation of what the VA guarantees to repay the lender when a borrower defaults on his or her loan. The specific
entitlement of any given borrower can be found on the Certificate of Eligibility (COE). A veteran may call their local VA office to obtain their COE
or it can be requested on your behalf by providing your DD Form 214 and a completed VA Form 26-1880. Entitlement determines eligibility and
issues a COE to qualifying applicants. Next, borrowers must also meet standard underwriting requirements as with any other loan in terms of
current income, credit history and score, past bankruptcies, and debt-to-income ratio, however it is generally easier to qualify for a VA loan than
conventional loans.
Benefits only offered through a VA guaranteed loan
• 100% financing without private mortgage insurance or 20% second mortgage
• No monthly mortgage insurance
• No minimum Credit Score Requirement
• VA funding fee waived for Veteran's receiving service connected disability compensation
• VA limits the fees a Veteran is allowed to pay
• No prepayment penalties
• Assumable loans available
guaranteed by the Department of Veteran Affairs (VA) and offer highly beneficial financial advantages to veterans who issued by federally
qualified lenders and are guaranteed by the U.S. Veterans Administration, designed to offer long-term financing to American veterans. VA loans if
they are VA-approved; for properties of this type not already approved, borrowers may fill out forms to submit to the VA to find out whether the
property will qualify. In terms of manufactured homes, some may be eligible for financing if they are classified and taxed as real estate and
affixed to a permanent location and foundation. In addition, manufactured homes must conform to building codes and zoning requirements.
guidelines and may not offer VA loans for all types of property.
VA "entitlement" is a representation of what the VA guarantees to repay the lender when a borrower defaults on his or her loan. The specific
entitlement of any given borrower can be found on the Certificate of Eligibility (COE). A veteran may call their local VA office to obtain their COE
or it can be requested on your behalf by providing your DD Form 214 and a completed VA Form 26-1880. Entitlement determines eligibility and
issues a COE to qualifying applicants. Next, borrowers must also meet standard underwriting requirements as with any other loan in terms of
current income, credit history and score, past bankruptcies, and debt-to-income ratio, however it is generally easier to qualify for a VA loan than
conventional loans.
Benefits only offered through a VA guaranteed loan
• 100% financing without private mortgage insurance or 20% second mortgage
• No monthly mortgage insurance
• No minimum Credit Score Requirement
• VA funding fee waived for Veteran's receiving service connected disability compensation
• VA limits the fees a Veteran is allowed to pay
• No prepayment penalties
• Assumable loans available
With a fixed rate mortgage, the interest rate does not change for the term of the loan; the monthly payment is always the same. Typically, the is
paid in full at the end of the term. In the early amortization period of the mortgage, a large percentage of the monthly payment pays the
interest on the loan. As the mortgage is paid down,more of the monthly payment is applied toward the principal.
A 30 year fixed rate mortgage is the most popular type of loan when borrowers are able to lock into a low rate.
Benefits:
• Lower monthly payments than a 15 year fixed rate mortgage
• Interest rate does not go up
• Payment does not go up, it stays the same for 30 years
Drawbacks:
• Higher interest rate than a 15 year fixed rate mortgage
• Interest rate stays the same even if interest rates go down
A 15 year fixed rate mortgage allows you to pay off your loan quicker and lock into an attractive lower interest rate.
Benefits:
• Lower interest rate
• Build equity faster
• If interest rates go up, yours is fixed
Drawbacks:
• Higher monthly payment stays the same if interest rates go down
• Interest rate stays the same even if interest rates go down
paid in full at the end of the term. In the early amortization period of the mortgage, a large percentage of the monthly payment pays the
interest on the loan. As the mortgage is paid down,more of the monthly payment is applied toward the principal.
A 30 year fixed rate mortgage is the most popular type of loan when borrowers are able to lock into a low rate.
Benefits:
• Lower monthly payments than a 15 year fixed rate mortgage
• Interest rate does not go up
• Payment does not go up, it stays the same for 30 years
Drawbacks:
• Higher interest rate than a 15 year fixed rate mortgage
• Interest rate stays the same even if interest rates go down
A 15 year fixed rate mortgage allows you to pay off your loan quicker and lock into an attractive lower interest rate.
Benefits:
• Lower interest rate
• Build equity faster
• If interest rates go up, yours is fixed
Drawbacks:
• Higher monthly payment stays the same if interest rates go down
• Interest rate stays the same even if interest rates go down
Adjustable Rate Mortgages (ARM)'s are loans whose interest rate can vary during the loan's term. These loans usually have a fixed interest rate for
an initial period of time and then can adjust based on current market conditions. The initial rate on an ARM is lower than on a fixed rate
ARM loans are usually amortized over a period of 30 years with the initial rate being fixed for anywhere from 1 month to 10 years. All ARM loans
have a "margin" plus an "index." Margins on loans range from 1.75% to 3.5% depending on the index and the amount financed in relation to the
property value. The index is the financial instrument that the ARM loan is tied to such as: 1-Year Treasury Security, LIBOR (London Interbank
Offered Rate), Prime, 6-Month Certificate of Deposit (CD) and the 11th District Cost of Funds (COFI). When the time comes for the ARM to adjust,
the margin will be added to the index and typically rounded to the nearest 1/8 of one percent to arrive at the new interest rate. That rate will
then be fixed for the next adjustment period. This adjustment can occur every year, but there are factors limiting how much the rates can adjust.
These factors are called "caps". Suppose you had a "3/1 ARM" with an initial cap of 2%, a lifetime cap of 6%, and initial interest rate of 6.25%. The
highest rate you could have in the fourth year would be 8.25%, and the highest rate you could have during the life of the loan would be 12.25%.
Some ARM loans have a conversion feature that would allow you to convert the loan from an adjustable rate to a fixed rate. There is a minimal
charge to convert; however, the conversion rate is usually slightly higher than the market rate that the lender could provide you at that time by
refinancing.
an initial period of time and then can adjust based on current market conditions. The initial rate on an ARM is lower than on a fixed rate
ARM loans are usually amortized over a period of 30 years with the initial rate being fixed for anywhere from 1 month to 10 years. All ARM loans
have a "margin" plus an "index." Margins on loans range from 1.75% to 3.5% depending on the index and the amount financed in relation to the
property value. The index is the financial instrument that the ARM loan is tied to such as: 1-Year Treasury Security, LIBOR (London Interbank
Offered Rate), Prime, 6-Month Certificate of Deposit (CD) and the 11th District Cost of Funds (COFI). When the time comes for the ARM to adjust,
the margin will be added to the index and typically rounded to the nearest 1/8 of one percent to arrive at the new interest rate. That rate will
then be fixed for the next adjustment period. This adjustment can occur every year, but there are factors limiting how much the rates can adjust.
These factors are called "caps". Suppose you had a "3/1 ARM" with an initial cap of 2%, a lifetime cap of 6%, and initial interest rate of 6.25%. The
highest rate you could have in the fourth year would be 8.25%, and the highest rate you could have during the life of the loan would be 12.25%.
Some ARM loans have a conversion feature that would allow you to convert the loan from an adjustable rate to a fixed rate. There is a minimal
charge to convert; however, the conversion rate is usually slightly higher than the market rate that the lender could provide you at that time by
refinancing.
Super-Conforming (“High Balance” or “Agency Jumbo”) Conventional Loan Limits
Minimum: $417,000 / $625,500
Maximum: $625,500 / $938,250
Super-conforming mortgages are conventional loans that exceed the standard loan limits set by Fannie Mae and Freddie Mac; however, these
loans are considered “conforming” conventional loans. These mortgages provide borrowers with access to the necessary funds to purchase a
home in an area where housing prices greatly exceed the loan limits for standard conforming loans.
Accordingly, these mortgage loans are only available to buyers with homes in high value counties. Borrowers in the continental U.S. may borrow
between $417,000 and $625,000 with a super-conforming loan. Borrowers residing in Alaska, Hawaii, Guam, or the U.S. Virgin Islands may secure
between $625,000 and $938,250.
Minimum: $417,000 / $625,500
Maximum: $625,500 / $938,250
Super-conforming mortgages are conventional loans that exceed the standard loan limits set by Fannie Mae and Freddie Mac; however, these
loans are considered “conforming” conventional loans. These mortgages provide borrowers with access to the necessary funds to purchase a
home in an area where housing prices greatly exceed the loan limits for standard conforming loans.
Accordingly, these mortgage loans are only available to buyers with homes in high value counties. Borrowers in the continental U.S. may borrow
between $417,000 and $625,000 with a super-conforming loan. Borrowers residing in Alaska, Hawaii, Guam, or the U.S. Virgin Islands may secure
between $625,000 and $938,250.
Conforming loans are conventional loans that meet bank-funding criteria set by Fannie Mae and Freddie Mac. Both of these stock-holding
companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Every year, form October to
October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan in a mean home price.
Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back
into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market -
effectively decreasing the demand for non-conforming loans.
Conforming Loan Limits
Number of Units Maximum original Alaska, Guam, Hawaii, and
principal balance U.S. Virgin Islands only
1 $417,000 $625,500
2 $533,850 $800,775
3 $645,300 $967,950
4 $801,950 $1,202,925
NOTE: The conforming loan limit in Alaska, Hawaii, Guam and the Virgin Islands is 50% higher.
companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Every year, form October to
October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan in a mean home price.
Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back
into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market -
effectively decreasing the demand for non-conforming loans.
Conforming Loan Limits
Number of Units Maximum original Alaska, Guam, Hawaii, and
principal balance U.S. Virgin Islands only
1 $417,000 $625,500
2 $533,850 $800,775
3 $645,300 $967,950
4 $801,950 $1,202,925
NOTE: The conforming loan limit in Alaska, Hawaii, Guam and the Virgin Islands is 50% higher.
A 20% down payment is not always feasible for every homeowner. The Federal Housing Administration (FHA) requires as little as 3.5% down. One
important thing to note, if you do not make a down payment of at least 20%, you may need to pay what’s called Mortgage Insurance each
month until you reach 20% equity in the home. FHA home loans are mortgage loans that are insured against default by the Federal Housing
Administration (FHA). These home loans allow banks to continuously issue loans without much risk or capital requirements. The FHA doesn't issue
obtain a loan, especially first time home buyers. These loans offer low minimum down payments, reasonable credit expectations, and flexible
income requirements. FHA loans also have more flexible repayment terms available. You can get a loan with a number of different repayment
options and payment plans. Whether you want a 30 year fixed rate mortgage or a reverse mortgage, the FHA has options for you.
An FHA insured mortgage may be used to purchase or refinance a new or existing
• Single family home
• 1-4 units
• Condominium unit (Homeowners Association Project must be approved by HUD)
• Manufactured housing unit (provided the manufactured housing unit is on a permanent foundation)
FHA insured mortgages offer many benefits and protections that only come with FHA
Easier to Qualify: Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.
Less than Perfect Credit: You don't have to have a perfect credit score to get an FHA mortgage. In fact, even if you have had credit problems,
such as a bankruptcy, it's easier for you to qualify for an FHA loan than a conventional loan.
Low Down Payment: FHA loans have a low 3.5% down payment and that money can come from a family member, employer or charitable
organization as a gift. Other loan programs don't allow this.
Costs Less: FHA loans have competitive interest rates because the Federal government insures the loans. Always compare an FHA loan with other
loan types.
Helps You Keep Your Home: The FHA has been around since 1934 and will continue to be here to protect you. Should you encounter hard times
after buying your home, FHA has many options to help you keep you in your home and avoid foreclosure.
important thing to note, if you do not make a down payment of at least 20%, you may need to pay what’s called Mortgage Insurance each
month until you reach 20% equity in the home. FHA home loans are mortgage loans that are insured against default by the Federal Housing
Administration (FHA). These home loans allow banks to continuously issue loans without much risk or capital requirements. The FHA doesn't issue
obtain a loan, especially first time home buyers. These loans offer low minimum down payments, reasonable credit expectations, and flexible
income requirements. FHA loans also have more flexible repayment terms available. You can get a loan with a number of different repayment
options and payment plans. Whether you want a 30 year fixed rate mortgage or a reverse mortgage, the FHA has options for you.
An FHA insured mortgage may be used to purchase or refinance a new or existing
• Single family home
• 1-4 units
• Condominium unit (Homeowners Association Project must be approved by HUD)
• Manufactured housing unit (provided the manufactured housing unit is on a permanent foundation)
FHA insured mortgages offer many benefits and protections that only come with FHA
Easier to Qualify: Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.
Less than Perfect Credit: You don't have to have a perfect credit score to get an FHA mortgage. In fact, even if you have had credit problems,
such as a bankruptcy, it's easier for you to qualify for an FHA loan than a conventional loan.
Low Down Payment: FHA loans have a low 3.5% down payment and that money can come from a family member, employer or charitable
organization as a gift. Other loan programs don't allow this.
Costs Less: FHA loans have competitive interest rates because the Federal government insures the loans. Always compare an FHA loan with other
loan types.
Helps You Keep Your Home: The FHA has been around since 1934 and will continue to be here to protect you. Should you encounter hard times
after buying your home, FHA has many options to help you keep you in your home and avoid foreclosure.
Non-conforming Conventional Loan Limits (“Jumbo Loans”)
Jumbo Loans exceed the maximum loan amounts established by Fannie Mae and Freddie Mac conventional loan limits. Rates on jumbo loans
are typically higher than conforming loans. Jumbo Loans are typically used to buy more expensive homes and high-end custom construction
homes, and usually require a higher down payment than traditional loans.
Minimum: $417,000
Maximum: N/A
Non-conforming loans are defined as conventional loans which do not meet the requirements set by Fannie Mae and Freddie Mac. Most
commonly, non-conforming loans cannot satisfy these guidelines due to exceeding conforming loan limits, in which case they are known as
“jumbo loans.”
As such, conventional loans (not including super-conforming loans) above $417,000 are considered non-conforming and jumbo. Non-conforming
conventional loans have no specified maximum limit and thus the maximum amount of money one can acquire varies from lender to lender.
Jumbo Loans exceed the maximum loan amounts established by Fannie Mae and Freddie Mac conventional loan limits. Rates on jumbo loans
are typically higher than conforming loans. Jumbo Loans are typically used to buy more expensive homes and high-end custom construction
homes, and usually require a higher down payment than traditional loans.
Minimum: $417,000
Maximum: N/A
Non-conforming loans are defined as conventional loans which do not meet the requirements set by Fannie Mae and Freddie Mac. Most
commonly, non-conforming loans cannot satisfy these guidelines due to exceeding conforming loan limits, in which case they are known as
“jumbo loans.”
As such, conventional loans (not including super-conforming loans) above $417,000 are considered non-conforming and jumbo. Non-conforming
conventional loans have no specified maximum limit and thus the maximum amount of money one can acquire varies from lender to lender.
A conventional loan refers to any mortgage loan that is not guaranteed or insured by the Federal Government. Since they are backed by
private banks and not the government, Conventional Loans can often times have stricter requirements to qualify. These loans typically follow the
conforming. Some conventional loans do not follow these guidelines and are known as non-conforming. Whether buying a home or refinancing
an existing mortgage, conventional loans could be the optimal choice, with cheap loan closing costs and a variety of flexible payment options.
Conventional mortgage guidelines allow borrowers to apply loan funds to a variety of different property types, including primary residences,
second homes, and investment properties. In addition, conventional loan funds may also be used to purchase condos, multi-unit developments,
modular homes, manufactured homes, and single family residences. Depending on the state in which the property is situated, the maximum
financing available for a conventional mortgage is 80%-95% of the home’s appraised value or the selling price, whichever amount is lower.
Conventional mortgage loans offer many advantages to government-insured loans:
• Conventional loans provide more underwriting flexibility for lenders since they will not be obliged to conform to secondary market guidelines.
• Due to being free of government regulation, conventional loan lenders may be more liable negotiate or remove particular loan fees.
• Lenders for conventional loans are more lenient in forms of collateral, allowing other collateral in addition to the mortgage property.
• Conventional loan lenders are more likely to finance a personal property in accordance with the mortgage loan, such as furniture and
appliances.
• Appraisals will only need to meet lender guidelines, rather than the strict regulations set in place by the Federal Housing Administration (FHA)
or the Department of Veteran Affairs (VA).
• For borrowers who cannot obtain Private Mortgage Insurance (PMI) for one reason or another, lenders may offer to self-insure the loan,
although they will typically charge a higher interest rate as compensation for assuming a greater risk.
• Lenders may be willing to compromise with borrowers who cannot afford closing costs by offering to fund a percentage of the closing costs in
return for higher interest rates
private banks and not the government, Conventional Loans can often times have stricter requirements to qualify. These loans typically follow the
conforming. Some conventional loans do not follow these guidelines and are known as non-conforming. Whether buying a home or refinancing
an existing mortgage, conventional loans could be the optimal choice, with cheap loan closing costs and a variety of flexible payment options.
Conventional mortgage guidelines allow borrowers to apply loan funds to a variety of different property types, including primary residences,
second homes, and investment properties. In addition, conventional loan funds may also be used to purchase condos, multi-unit developments,
modular homes, manufactured homes, and single family residences. Depending on the state in which the property is situated, the maximum
financing available for a conventional mortgage is 80%-95% of the home’s appraised value or the selling price, whichever amount is lower.
Conventional mortgage loans offer many advantages to government-insured loans:
• Conventional loans provide more underwriting flexibility for lenders since they will not be obliged to conform to secondary market guidelines.
• Due to being free of government regulation, conventional loan lenders may be more liable negotiate or remove particular loan fees.
• Lenders for conventional loans are more lenient in forms of collateral, allowing other collateral in addition to the mortgage property.
• Conventional loan lenders are more likely to finance a personal property in accordance with the mortgage loan, such as furniture and
appliances.
• Appraisals will only need to meet lender guidelines, rather than the strict regulations set in place by the Federal Housing Administration (FHA)
or the Department of Veteran Affairs (VA).
• For borrowers who cannot obtain Private Mortgage Insurance (PMI) for one reason or another, lenders may offer to self-insure the loan,
although they will typically charge a higher interest rate as compensation for assuming a greater risk.
• Lenders may be willing to compromise with borrowers who cannot afford closing costs by offering to fund a percentage of the closing costs in
return for higher interest rates
|
Real Estate Broker - CA Dept. of Real Estate License #01906363 | Malaga Funding, Inc.
NMLS# 872515 | NMLS Consumer Access: http://www.nmlsconsumeraccess.org
NMLS# 872515 | NMLS Consumer Access: http://www.nmlsconsumeraccess.org
| Andrea Dobrick | NMLS# 267223 Jose S. Gomez | NMLS# 262949 |
| RESIDENTIAL AND COMMERCIAL REAL ESTATE FINANCING |
 |
 |
 |
 |
 |
 |
| Rates hit HISTORIC LOWS!!! |
| 350 West 5th Street Suite 206 San Pedro, CA 90731 |
Loan Program
Loan Program
| Info@MalagaFunding.com |
| 310.514.8799 |
 |  |  |  |  |