Even the 49ers Are Refinancing
Because interest rates have dropped so much, the Santa Clara Stadium Authorities are refinancing the $850 million loan. This will save the project around $90 million.
So if you’re thinking about refinancing, now is the time to start talking to a certified loan officer about your situation. On June 3rd, the new FHA rules go into affect which tighten lending standards and increase some fees like the FHA’s mortgage insurance fund which acts like a primary mortgage insurance (PMI) against default.
Probably the biggest change that will impact you and your money is that if you put down less than 10% of the loan, you will be required to pay the mortgage insurance for the life of the loan or 11 years depending on how much was financed. Before you could request it to be removed after you owned 22% of the house.
If you require a jumbo mortgage (over $625,500), then you will be required to put down 5% rather then the current 3.5% down payment.
Mortgage Rates Are Expected to Rise
Because of all the refinancing, mortgage rates are expected to rise. Even a quarter of a percent can make a big difference in your monthly payment.
There’s a tip going around stating that mortgage rates are higher on Monday and Friday and lower in the middle of the week. Talk to a reputable loan officer who will know when the rates are best for your financial situation. They will also be able to find a selection of mortgage lenders.
Beware the Scam Artists
We found a useful article on Yahoo! Homes.
- Beware of phony government programs. There is only one HARP program which we discussed in our blog post on how to refinance when you’re under water. Don’t trust anyone who calls. Contact a reputable loan officer to find out if you qualify.
- Beware of real estate attorneys with ulterior motives. An attorney won’t be able to get you a better loan. Only a certified loan officer can do that. You would need an attorney if you’re fighting a foreclosure. And if you’re at that point, you want to have one with experience in your area as well as solid references, not someone who calls you drumming up business.
- Beware of rent-to-own or leaseback schemes. The con artist has the homeowner turn over the deed or title promising that someone with better credit will apply, and get the homeowner a lower rate. But the scammer never intends upon turning back over title to the legitimate homeowner. The bad news is that your name is still on the loan documents, and so you’re on the hook for the full amount, and you’ve lost title to your own home.
Often the con artists will bundle these, such as promising to get you a government loan and then lease it back to you. Never under any circumstances sign anything without independent verification first. Your loan officer can help you review these options to be certain it’s not a scam.