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PostHeaderIcon FHA, Refinance Appraisal & Refinance Fee

FHA is a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low to mid income borrowers who are unable to make a big down payment. FHA loans allow clients to borrow up to 97% of their home value. For an FHA loan 3.5% down is what is required when purchasing a home. FHA refi is a great way for borrowers with less than perfect credit to still qualify for a great interest rate. Even though FHA and conventional are somewhat the same, they are still different in the way that their guidelines are a little different. FHA also allows a program called a streamline, this mean that if a borrower is already in an FHA loan they can do a refinance with out all the paper work. The basic guidelines for a streamline are that the client must already be in an FHA loan, they must not be late on mortgage, and also the refi must lower the payments or the interest rate. Also no cash out can be done with a FHA streamline refinance.

A refinance appraisal is done a certified real estate appraiser. An appraisal is an important part of the refinance. The appraisal tells where your loan to value is or also called the LTV. To do a refinance the property must not be upside down, meaning that the property must be worth more than the client owes. When a accurate appraisal is done and a borrower want to do a cash out refi, the appraisal will determine how much they can cash out. All refinance appraisals must be done by a certified appraiser before a client knows if they are a complete qualified.

Refinance fees are fees that one must pay during a refinance. There are various types refinance fees. Some of these costs are lender fees, third party fees, and pre-paid items. Lender fees consist of origination, points, application, credit report and appraisal. Third party fees consist of company closing costs, title, and title insurance. Pre-paid items are not really considered to be closing costs, these are items you pay regardless of refinancing or not. They include your taxes and insurance of your property. As a whole closing costs typically range from two to six percent of your loan amount. When the refinance of mortgage is started you will get an estimate of these costs. Also if there is enough equity in your home, the costs may be rolled into the loan. This would save you from any money coming out of your pocket at the closing. Closing costs also fit into two categories; recurring fees and non-recurring fees. Recurring fees are your monthly payments, your taxes and insurance. Non-recurring fees are points, lender fees, and application fees. All these costs for your refinance can be laid out for you in a good faith estimate which can be requested once your application is complete. Refinance fees are also known as closing costs or anything that is making your loan amount rise. If your loan amount is higher because of closing costs this due to the refinance fees.

PostHeaderIcon Refinance Appraisal & Refinance Penalty

A refi appraisal is used when doing a refinance on a mortgage. An appraisal is done to find out the value of the home. The value of the home is important during a refinance because of the loan to value or better known as the LTV. A good appraisal is one that has accurate comparables of your home. One can get a good appraisal from a certified real estate appraiser. Some question that a person can ask an appraiser is how much has my home value gone up? Is the surrounding area been strong for appraisals? Is my home in good standing for the value or should I look into doing improvements? Also you don’t want appraisal to be inflated, because this will give the underwriters and lenders and reason to terminate the deal.

A refinance penalty is a penalty with the lender which says that if you refi your mortgage within a certain time period, you will be charged with a penalty. In today’s market people who are looking to refinancing their mortgage do not have to worry about pre-payments since they hardly exists. Refi penalty were more for people who did sub-prime loan. These were the clients which were more incline to get a refi penalty. When refi penalty were more frequent to avoid them people would either buy them down at the closing or they would just have to wait the terms of the penalty. It is always a good question to ask about the refi penalties, if there are any. In the act of refinancing your mortgage today pre-payment penalties are a thing or the past and companies rarely have them anymore.

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