White House Lowers FHA Streamlined Refinancing Fees

As many as three million borrowers with government-insured mortgages may be eligible for lower borrowing costs when they participate in streamlined Federal Housing Administration (FHA) refinancing, according to the White House Administration on Tuesday, March 6.

The fresh round of changes from the administration affects loans the Federal Housing Administration insures and would reduce fees on those mortgages for borrowers previously unable to borrow at lower rates.

Those using the so-called “streamline” refinance program allows FHA borrowers to win new FHA-backed loans without going through some of the more stringent guidelines that make locking into new loan terms more challenging.

The Obama administration said it will lower the costs on up-front mortgage insurance premiums to 0.01 percent for streamlined refinancings of FHA loans. The White House also said it will cut the annual fee for these refinancings in half to 0.55 percent.

Eligible borrowers for the streamline refinance program must have taken out those FHA loans before June 1, 2009.

The changes to the government’s streamlined refinancing program could help the typical FHA borrower find “significant monthly savings,” according to the administration.

Since mortgage rates are at historic lows and hover around 4 percent, the administration estimates a typical FHA borrower with $175,000 outstanding on their loan could reduce monthly payments to $915 a month and save $100 a month more than the borrower would have under current FHA fees.

Owning A House After Collections

Getting a collection item on your credit report will have undesirable effects on your FICO score. There are ways you can take control of the situation and remedy or remove the collection account altogether from your credit history. Here’s what we’ll cover:

  • What’s a collection?
  • How do I fix a collection?
  • How does a collection item affect my FICO score?

Collections: So What Are They Exactly?

An account is in “collections” when the past-due amount is purchased by a credit agency who will attempt to collect the balance. Agencies buy them at a reduced rate, and they are able to find out your residence and place of employment. A collection item stays on your credit report for 7 years, even if it is eventually paid in full. Read any information the creditor and/or collection agency puts on your credit report very carefully.

Collections: How To Fix A Collection

If you have an overdue account, the collection agency will make contact with you, often by way of a letter. You usually get 30 days to dispute the information in the letter, so read the letter immediately in case there are mistakes. You should keep track of all correspondence/conversations with the creditor or collection agency. Since the creditor is the one with the negative mark on their accounting books, they are the best ones to negotiate with as they are able to decide whether or not to notify the credit bureaus to delete the collection item from your report. It is in your best interest to secure all agreements in writing before paying. It’s a good idea to familiarize yourself with your rights under the Fair Debt Collection Act.

Collections: How Do They Impact Your Credit?

Unfortunately, when an account is sent to collections, it will show up on your credit report for 7 years, even if the debt is paid. By paying the debt, the collection item will be noted as “paid in full” and your FICO score will no longer continue to be affected by the outstanding debt. Even after the debt is paid, you can continue to dispute it if you wish to do so. The best way to prevent collections is to stay on top of your bills, update your postal address and information when you move, and habitually track your credit report for any changes.

Owning After Collections

Owning a home again after collections is something that can be done, but you will want to work closely with a loan officer who can help you get approved. It is still possible to own again after collections, but there are widely different rules about how to deal with them between lenders. You will want to find the right loan officer at the right lender if you plan to own again after collections.

Importance of DD214 form

Many years ago the Paradise Valley real estate market saw an influx of veterans and families of veterans relocating to the area. This may be particularly useful information. The VA streamline refinance loan, or IRRRL, has a number of benefits to veterans wanting to refinance their VA loan. It requires little paperwork, but there are a few documents that are required to process this loan. One of these documents is the veterans DD 214 form .

What is the veterans DD-214? It is proof that you were in the military. It shows your discharge, your dates of service and current classification, whether retired, separated, or National Guard or Reserve status. You need your DD-214 to receive most of your military rewards including VA loans.

Servicemen and women receive their original DD-214 at the end of their retirement or separation from the military. Its an important document, but some veterans misplace their DD-214 for one reason or another as they relocate or transition back to civilian life.

Its important to know that you can ask for a free copy of your DD-214 by going to the National Archive official government site (archives.gov) through their eVetRecs system and filling out an online form. You need to be either the service member or the next of kin to request the DD-214 with this form. The following information may be asked for:

  • woman’s Social Security number
  • Branch of service
  • Dates of military service
  • Place of discharge

The form is required to be authorized by the service member or next of kin. It would make the process easier to give the reason for wanting the form as a VA loan refinance.

keep in mind that a DD-214 will always free through the US government. There are companies who will offer to do the work on your behalf but will charge a fee. While this isnt illegal, it is unnecessary as applying for the form yourself is quite easy and any company you pay wont be able to make your order go through any faster.