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Here are the top 10 things you need to know about refinancing your FHA Alaska Mortgage.

Keep in mind these are simply guidelines – each borrower’s situation is different. The best way to work through your options is to contact me directly.

• The mortgage that is to be refinanced must ultimately be insured through the FHA.

Often called a streamline refinance, this type of refinance is an FHA to FHA loan

• The current mortgage must be current and not be delinquent.

When you request a streamline refinance , a payment history is going to be requested from your current mortgage holder.  They are going to examine your payment history for the past 12 months.  During the most recent 12 months, you cannot have been over 30 days late on your mortgage payment to qualify for a streamline refinance.

• The results of the refinance must lower the monthly principle and interest payments for the borrower, or the borrower is paying off an existing FHA adjustable rate mortgage.

If you are applying for a streamline refinance without an appraisal, your mortgage payment must be reduced if your existing mortgage is a fixed rate mortgage. However, if you existing mortgage is an FHA Adjustable Rate Mortgage, your monthly principal and interest payment can be higher than what you are currently paying.

• You may refinance your existing FHA mortgage using the “streamline” process without requalification.

One of the major benefits of an FHA streamline refinance is that you do not have to re-qualify for the mortgage.  Your credit will not be checked, and your income will not be re-verified.  This can be an advantage, especially if you have had a major change in income and credit that could preclude you from qualifying under new guidelines.

• The loan amount for a streamline refinance without an appraisal cannot exceed the original loan amount

The only drawback to applying for a streamline refinance without a new appraisal is the fact that your loan costs and payoff may exceed your original loan amount.  If that is the case, then you will have to pay for the additional amount out of pocket.

• Your loan amount can exceed your original loan amount if you have a new FHA appraisal done and your LTV doesn’t exceed 97.75% of the new appraised value.

If cash is tight, and your closing costs plus payoff are going to exceed the original loan amount, then you may want to consider the streamline with an appraisal process.  Your total closing costs will be more expensive, but it may allow you to finance all of your costs, and even get cash back up to $500.00.   Before you go down this road, have a candid conversation with me regarding what the possible value of your home is today.  While I cannot guarantee what your new appraisal value may be, I have resources available to me that can help determine what a reasonable value of your home is under current market conditions.

• You can include your closing costs, discount points, current interest, taxes, insurance, late charges and escrow shortages in your new loan amount.

Depending on which streamline process you choose, all of the above costs can be included as long as your final loan amount doesn’t exceed your original loan amount on a streamline without an appraisal, and 97.75% of the value of your home on a streamline with an appraisal process.

• You can pull equity from your home in an FHA “Cash Back” refinance scenario.

Your existing mortgage does not have to be an FHA loan in order to qualify for a cash out FHA refinance.  FHA allows the highest cash back compared to other types of financing, including conventional and VA.  If tapping your equity in your home is important to you, this may be your perfect solution. The maximum loan to value for a cash-out refinance is 95% of the new appraised value. Beginning January 1, 2009, FHA will require two appraisals for anyone requesting cash back above an 85% loan to value.  Under the cash out refinance option, you must qualify using full approval process where you must document your income, credit, and assets.

• Refinancing from a Conventional loan into a New FHA loan.

You may use the regular FHA process for refinancing from a conventional loan to an FHA loan under the full approval process.  There are many reasons why you might want to consider this option, however, the most widely used reasons are credit and income. If your credit scores are lower than 680, you may be able obtain a lower interest rate, and closing costs by going FHA rather than a conventional to conventional refinance

• Loan limits for Alaska vary from community to community.

Click on this link for Alaska 2009 FHA Mortgage Limits

Jackie Toppin Mortgage Banker Mortgage License # 100110 Preferred Mortgage Branch of Residential Mortgage Mortgage License #100083 3111 “C” Street, Suite 325 Anchorage, AK, 99503	Work: 907-261-7655 Fax: 907-261-7543 jackie@jackietoppin.com http://www.jackietoppin.com
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