How to Refinance a Home Loan

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Want to save money on your mortgage? Refinancing might be the best way to take advantage of the historically low rates. Depending on your goal, make make great financial sense to refinance your mortgage. Here’s what you need to know to make the best decision.

Benefits of Refinancing your Home Loan

Before you refinance your home loan, it is important to determine your financial goals. Do you want a lower interest rate? Do you want to change your adjustable rate mortgage to a fixed-rate mortgage? Do you want to pay off your loan in 15 years instead of 30? Do you want to lower your monthly payments? Did you know you can also refinance to consolidate a first and second mortgage? You can also extend your current loan to cash out if you want to start a business, help a family member in financial crisis, or go on an expensive vacation.

Do the math.

Ask your loan officer to help you figure out how much refinancing will cost you, and how much you’ll save over the long term. If refinancing will save you $200 per month, but you have to pay $2,000 in closing costs, you’ll break even in 10 months. How much longer do you plan to stay in the home? If you plan to stay there for more than 10 months, refinancing may be a good idea. If you’d like to move out sooner, the costs associated with refinancing may not be worth it. Also, if you lower your interest rate but extend your loan from a 15-year to a 30-year, you’ll lower your monthly payments but end up paying more interest over the life of the loan.

Talk to a loan officer to review your mortgage refinancing options.

If you decide refinancing is right for you, start by calling loan officer. He or she may be able to save you on closing costs and other fees by recommending a loan program specifically for your situation. Before you start the process it is important to do your research to find the best loan option to meet your goals. Do not just settle for what your current bank offers just because you have a car loan or checking account there; let your lender know that you’re shopping for mortgages so you can make an informed decision and perhaps he or she will find a way to offer a better deal.

Know your refinancing options.

Find out if you are eligible for any special refinance programs that may benefit you over the standard refinance mortgage. For example, if you currently have an FHA loan, you may qualify for an FHA streamline refinance, which would allow you to refinance with no appraisal, no income, and little to no closing costs. If you currently have a conventional mortgage, you may qualify for the Home Affordable Refinance Program (HARP), which may allow you to refinance, regardless of your home’s value, with no out-of-pocket costs.

Expect to gather documentation and paperwork.

Refinancing your home loan is a process that usually comes with a significant amount of paperwork to document your income assets and passed credit. Do not be overwhelmed by the request for documents with the current laws and underwriting guidelines. Even those with perfect credit have to provide the same documentation to get a home loan or mortgage refinance.

When you work out the details of your refinance mortgage, your loan officer will help you navigate the steps from initial loan consultation to closing. Be prepared to provide documentation, including driver’s license, social security card, one month of paystubs, two months of bank statements, past two years of W-2 statements, and your current mortgage statement.

Once you sign your application and send in the documentation, your loan officer will send in your file for underwriting, which may require additional documentation. You may also be required to complete a home appraisal. When you’re finally approved in underwriting, you’ll be cleared to close. Your loan officer will review the final figures, you’ll have to pay closing fees and documents, and then the process is complete.

Steps to Refinancing your Home Loan

1) Initial Mortgage Consultation
2) Sign application
3) Send required documents – (drivers license, social security card, 1 month paystubs, 2 months bank statements, past 2 years w2 statements, current mortgage statement)
4) Underwriting Process
5) Complete the Appraisal (if required)
6) Clear to Close – (once fully approved in underwriting your loan will be “Cleared to Close” and scheduled for closing)
7) Meet for the Home Loan Closing

For more information about what Riverbank Finance offers for refinancing, schedule an appointment with one of our loan officers by calling 800-555-2098 or fill out our online refinance application or by completing the form below.

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Freddie Mac 97 Home Loan Offers Alternative to FHA Loan

Buy a Home with only a 3% down payment with Freddie Mac’s 97% Home Loan!

Freddie Mac Offers Alternative to FHA loan
If you are a first-time home buyer or struggle to come up with a conventional down payment for a house, the FHA Loan is no longer your only option. Freddie Mac’s new Home Possible Advantage program is a conventional loan option that adds another possibility to the low down-payment offerings.

Freddie Mac Home Possible is available to all first-time home buyers and those with moderate to low income levels. The type of Home Possible loan you choose depends on your property.

What is the Freddie Mac Home Possible Loan Program?

Home Possible, available December 2014, requires a 5% down payment for those buying a 1-to-4 unit primary residence, condo, PUD (planned unit development), or manufactured home.

Home Possible Advantage, available March 2015, requires a 3% down payment and is only available to those buying a 1-unit primary residence, condo, or PUD.

Mortgage options also vary for the two Home Possible programs:

  1. Home Possible includes fixed-rate mortgages, Adjustable Rate Mortgages for 1 or 2-unit primary residences that are not manufactured homes, and renovation mortgages.
  2. Home Possible Advantage includes fixed-rate mortgages, and renovation mortgages.

To qualify for Home Possible Advantage, you must have a credit score of at least 660. If you are a first-time home buyer, you also must participate in a home borrower education program, such as Freddie Mac’s CreditSmart.

Benefits to the Freddie Mac 97 Home Loan

The largest benefit to the Freddie Mac 97% home loan is the flexibility in down payment options. While a 5% down payment may offer slightly better loan terms, a low down payment mortgage may be a good fit for many homebuyers.

Other Benefits Include:

  • Low Total Mortgage Payments
  • The down payment may be 100% gifted from a family member
  • Lower PMI payments for high credit score borrowers
  • PMI can be removed with sufficient home equity whereas FHA mortgage insurance is permanent
  • Less property condition restrictions compared to FHA requirements
  • Quicker Loan Closings

Which program should I choose for my home purchase?

What’s the difference between Home Possible, Fannie Mae’s 3% down program, and the FHA loan, and which one is right for you? It depends on your financial situation, the property you want to purchase, the requirements of each institution, and your lender’s preferences.

With an FHA loan, you have to put down at least 3.5% of the total home value. Fannie Mae requires a 3% down payment, and Freddie Mac’s Home Possible requires 3% or 5%, depending on the type of property you’re buying.

Whichever option you choose, you’ll have to pay private mortgage insurance (PMI). Anytime you offer a low down payment of less than 20% of the home’s value, you have to pay to insure the lender against default.

For the FHA loan, you’ll have to pay an upfront PMI fee and a monthly fee, which never goes away. If you choose a Freddie Mac or Fannie Mae loan, you can choose between paying an upfront fee with a slightly higher interest rate or a monthly fee, which goes away once you pay 20% of your total loan value.

The Freddie Mac and Fannie Mae 3% down programs are similar but have slightly different regulations, so check with your lender to see which one might be a better fit for your circumstances.

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For more information on Freddie Mac Home Possible, visit http://www.freddiemac.com/homepossible/hp.html.

 

FHA Lowers Mortgage Insurance Premiums for 2015

FHA Lowers Mortgage Insurance Premiums for FHA Loans in 2015

The Federal Housing Administration has announced that they will be reducing the mortgage insurance premiums (sometimes called PMI or MIP) charged on all FHA loans. The rate reduction will be nearly half the current costs cutting the insurance premiums down from 1.35% to .85% annually. This is great news for new home buyers and those that currently have FHA mortgage loans.

The History of the Federal Housing Administration (FHA)

The FHA program has been in place since 1934 when it was created to help spur home ownership in the United States. At the time, banks required very large down payments and strict mortgage terms which allowed very few to qualify to become homeowners. Since then it has insured mortgage loans for over 34 million home owners and remains a major loan program to consider.

What are the benefits of FHA Loans versus Conventional Loans?

FHA loan options typically have lower down payment requirements and more flexible guidelines than conventional financing. Many clients choose FHA financing for home purchases for benefits that can include as low as a 3.5% down payment, higher debt-to-income (DTI) ratios, home renovation options, lower mortgage rates and lower minimum credit standards as compared to conventional loans.

What do Lower Mortgage Insurance Premiums mean for New Home Buyers?

With the lower mortgage insurance premiums, home buyers will be able to save on their monthly payments. This monthly savings may allow them to qualify more easily or even qualify for a more expensive house for the same mortgage payment (FHA loan example).

With today’s low inventory of homes for sale, this may allow home buyers to expand their searches to find the home they have been waiting to purchase. Additionally, the lower mortgage insurance premiums may allow them to consider renovating a property or including upgrades into their financing through programs such as the FHA 203k renovation loan. The FHA 203k Streamline Renovation Mortgage may allow a home buyer to finance up to $35,000 in repairs for things such as new appliances, carpeting, flooring, paint, electrical fixtures and other upgrades to make a home their dream home.

What does Lower FHA Mortgage Insurance Mean for People that Have Recently Gotten a FHA Loan?

Those that have recently purchased a home with FHA financing or refinanced to a FHA loan, may be eligible to take advantage of the reduced insurance costs by refinancing their mortgage. Now is a great time to refinance due to the lowest rates in nearly 2 years as well as the lowered insurances costs.

If you have paid at least 6 mortgage payments on your FHA loan you may qualify for a FHA Streamline Refinance. This FHA refinance program allows a homeowner to refinance their FHA loan to a new FHA loan with a lower rate. The FHA Streamline Refinance Mortgage typically has no costs, no application fees, no appraisal and no income documentation.

How Do I Qualify for a FHA Streamline Refinance Mortgage?

Qualifying for a FHA streamline refinance is as easy as paying your mortgage payments on time. Once you have paid a minimum of 6 mortgage payments on your FHA loan and you can save at least 5% off your mortgage payments you may be eligible for a FHA Streamline refinance loan.

How much will the Lower Mortgage Insurance Costs Really Save on a FHA loan?

To show the savings on the FHA mortgage insurance it may be best to take a look at an example FHA loan scenario. Let us make the following assumptions:

Loan Purpose: Home Purchase
Loan Type: FHA 30 Year Fixed
Purchase Price: $250,000
Down Payment: 3.5% ($8,750)
Interest Rate: 3.50%
Base Loan Amount: $241,250
Annual Property Taxes: $2,400
Annual Home Insurance: $900

Before 1/26/2015After 1/26/2015
Principal & Interest$1,102.28$1,102.28
Property Taxes$200.00$200.00
Home Insurance$75.00$75.00
Mortgage Insurance$271.41$170.89
Total Mortgage Payment$1,648.69$1,548.17

In the above illustration of reduced FHA PMI, the home buyer would save $100.52 per month on their mortgage payments. Over the life of their loan that would give them a total savings up to $36,187.20 (if they kept their loan for the full term). This is a savings of over 6% which would be the equivalent of $15,000 more purchasing power for the same payment or a home purchase price of $265,000 vs $250,000.

When do the lower FHA Mortgage Insurance Premiums start?

FHA case numbers starting Monday January 26th, 2015

The FHA will begin issuing new FHA case numbers starting Monday January 26th, 2015. From that date forward any new FHA loans started will be allowed to take advantage of the lower mortgage insurance costs.

2015 FHA Mortgage Insurance Premiums Chart

FHA MIP Chart for 2015

What if I am currently in the process of getting a FHA loan? Can I still get the lower rates?

Yes. You may be able to get the reduced MIP if you have not yet closed and funded your loan. Speak with your loan officer about requesting a cancellation of your current FHA case number and ask them to request a new FHA case number on or after January 26th, 2015.

What is the Minimum Credit Score for FHA Loan Financing?

Each bank and lender sets their minimum required credit score for FHA financing. While most banks and lenders set the minimum credit score at 640 and up, some lender allow for credit scores much lower. For example as of 1/26/2015 Riverbank Finance LLC will allow credit scores as low as 560 with a 10% down payment and 580 with only a 3.5% down payment for FHA loans in Michigan.

How Do I Apply for a FHA Mortgage Loan?

The Federal Housing Administration does not directly lend money. They insurance banks and lenders against losses which allow them to lend with eased guidelines. Applying for a FHA loan can be done by speaking with a licensed loan officer at 800-555-2098 or click here to apply for a FHA Loan.

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Where can I Find More Information the Reduced FHA MIP?

The announcement was made on January 9th, 2015 from the FHA Mortgage Letter 2015-01.  For more information on FHA loans visit www.hud.gov or speak with a HUD approved counseling agency in your area.

Disclaimer: Riverbank Finance LLC is neither a government organization nor part of FHA or HUD. Rates, terms, fees, and programs given above are examples for illustration purposes only. This is not a commitment to lend. Not all will qualify.

Updates for Fannie Mae Conventional 97% Mortgage Loans

Fannie Mae Logo

FANNIE MAE CONVENTIONAL 97% MORTGAGE LOANS

A Conventional 97% mortgage loan is a Fannie Mae home loan that allows homeowners to purchase a home with only a 3% down payment. It is a great misconception that all conventional mortgage loans require a 20% down payment however many options for alternative financing do exist with low down payments or even no down payments.

The Conventional 97% Mortgage is Back!

The 3% down Conventional mortgage is now back through Fannie Mae’s My Community Mortgage® as well as for standard conventional loans. This program is designed for first time homebuyers that may not have the resources for a large down payment. At least one of the borrowers on the loan must be a first time home buyer in a purchase transaction. The  My Community Mortgage® program is only available for low to moderate income families and may require home buyer education prior to loan closings. The standard conventional mortgage is also designed for first time home buyers but does not have income restrictions.

97% refinance loans will also be made available for those who do not qualify for a HARP refinance but have loans owned by Fannie Mae (see Fannie Mae Loan Lookup tool to confirm eligibility). This high LTV refinance program will be available only as a limited cash-out option which allows a borrower to simply change their interest rate or mortgage term.

Update on the Conventional 97% Mortgage from Fannie Mae Announcement

Announced on December 8th, 2014 Fannie Mae will reinstate the 3% down mortgage program. Fannie Mae’ Executive Vice President Andrew Bon Salle explains,  “This option alone will not solve all the challenges around access to credit.  Our new 97 percent LTV offering is simply one way we are working to remove barriers for creditworthy borrowers to get a mortgage.  We are confident that these loans can be good business for lenders, safe and sound for Fannie Mae and an affordable, responsible option for qualified borrowers.”

Read: Fannie Mae’s Announcement on 97 Percent LTV Option for First-Time Homebuyers

Alternatives to Conventional 97% Mortgage Financing

If a borrower does not meet the eligibility requirements for a Conventional 97% Mortgage, homebuyers may need alternatives for low down payment home loans. One great options is the FHA mortgage program which still only requires a 3.5% down payment.

FHA Mortgages have been very popular over the past several years as they are more flexible on credit and qualifying after bankruptcies and foreclosures. FHA loans also may allow for family members or close friends to gift the down payment.

That’s right, a borrower can buy a home with none of their own money out of pocket which may be limited on 97% Conventional financing. Closing costs may also be paid by the seller with a limit of 6% of the home’s purchase price while Conventional loans limit seller paid closing costs (Seller concessions) at 3%.

Conventional 97 Mortgage Alternatives: USDA Rural Development Loan

Another low down payment mortgage alternative may be the USDA Rural Development Loan which is a no down payment mortgage with 100% financing. While the USDA option may be great to consider, there are downsides.  Currently many USDA field offices are caught up on loan application and are approving Rural Development loans very quickly however at times they do get several weeks behind before reviewing applications.

One major factor of this loan option is that the home must be in a rural area. The USDA guarantee this home loan type to help grow rural communities therefore the location of the home cannot be in a largely urban area (see the USDA’s eligibility website for more information).

USDA Rural Development Loan Benefits:

  • Zero Down Mortgage
  • Lower Mortgage Insurance Premiums (PMI)
  • Government Guaranteed Mortgage Loan
  • Easier to Qualify for than the Conventional 97 Mortgage
  • Lower Mortgage Interest Rates

Conventional 97 Mortgage Alternatives: Conventional 95 Mortgage Loans

Lastly, the Conventional 95% mortgage loan is another great alternative to the Conventional 97% mortgage loan. Not everyone will qualify for the 3% down payment mortgage including those that are not first time home buyers or make too much money for the My Community Mortgage®. With a couple of quick yard sales and postings on craigslist you may be able to come up with the extra cash for a 5% down payment which may offer better financing terms. While only 3% down sounds great, you will be much happier with the lower interest rates and Mortgage Insurance Premiums (PMI) that just a bit more cash will bring.

Conventional 95 Loan Benefits:

  • Low Down Payment Mortgage with only a 5% Down Payment Requirement
  • Lower Mortgage Insurance Premiums (PMI)
  • Government Guaranteed Mortgage Loan
  • Easier to Qualify than the Convention 97 Mortgage
  • Lower Mortgage Interest Rates
  • More Lenders participate in Conventional 95 Financing

Apply for Low Down Payment home loans like Conventional 97% Mortgage Financing

Riverbank Finance would be more than happy to help you review your low down payment home loan options. Apply now for a Conventional 97% mortgage or My Community Mortgage® for first time homebuyers and buy a home with only a 3% down. Call us today at 800-555-2098 or submit a request below for additional information.

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New Loan Estimate Form and Closing Form for 2015

CFPB logo - New GFE Loan Estimate Changes for 2015November 20th the Consumer Financial Protection Bureau (CFPB) released a nearly 2,000 page document relating to RESPA disclosures and Real Estate Closings (If you have a month of free time click here to read). These forms are known as the “Know Before You Owe” mortgage disclosures. This final rule applies to all clients applying for and closing on residential mortgage loans.

The new rule mandates the use of a new three page “Loan Estimate” which replaces the Good Faith Estimate (GFE) and the Truth in Lending (TIL) Disclosure. There is also a new replacement for the HUD-1 Settlement Statement which is a five page document called the “Closing Disclosure“.

What is the new Loan Estimate form?

The new loan estimate form is a three page disclosure triggered when an application is made to a mortgage company. The Loan Estimate provides a summary of loan terms, loan costs, and other closing costs.

When does a client get the New Loan Estimate Form?

The mortgage company must provide the Loan Estimate within three business days of the client’s application. The new form must be given to the client at  least three business days before the loan closing (3 additional days if mailed) which is similar to the current regulations for mortgage disclosures.

Re-Disclosure of a revised Loan Estimate May Create Loan Closing Delays

In circumstances where the lender may need to provide a revised Loan Estimate, it cannot be provided on or after the date of the Closing Disclosure. The lender must provide the Loan Estimate at least three business days before closing of the loan (they may close on the fourth business day). Remember, this ONLY applies if a revised Loan Estimate needs to be provided.

What is the New Closing Disclosure Form for Real Estate Closings?

The new Closing Disclosure is a five page form that replaces the HUD-1 Settlement Statement and the final Truth in Lending Disclosure which provides a summary of the actual loan terms, loan costs, and all other closing costs.

New Closing Disclosure Waiting Period for a Real Estate Closing

The lender must provide the Closing Disclosure to the consumer at least three business days before the loan closing. If there are changes to the Closing Disclosure between when it is given to the client and the loan closing, another three business day wait period must be met before closing. Remember this rule is already in place for the Truth in Lending Disclosure so it is not a new wait period.

The numbers on the Closing Disclosure form must be as accurate as possible, however, the final Closing Disclosure must be updated with the actual numbers at close.

What changes would require Re-Disclosure of the Closing Disclosure Form?

There are three changes that would require a new Closing Disclosure be presented to the client.

  1. Changes to the loan’s APR greater than 1/8 percent (or ¼ percent for ARM loans),
  2. Changes to loan product (example FHA to conventional),
  3. The addition of a pre-payment penalty.

Does the Final Rule apply to All Mortgage Loans?

No. The final rule does not apply for home-equity loans, reverse mortgages, mobile home loans or creditors that make five or fewer mortgages per year. For additional information on the new forms and closing disclosures you are welcome to call a Riverbank Finance Loan officer at 800-555-2098 to review how it may affect your real estate closings.

Other Helpful Links

Compare Current GFE and HUD-1 Settlement Statement with the new Loan Estimate Disclosure and Loan Closing Disclosure (Before and After)

NOTE: Riverbank Finance LLC is not a government organization nor associated with or acting on the behalf of the a government entity. Information in the article should be used for illustration purposes only and not taken as legal advice. It is recommended that you speak with a competent attorney to review how the applicable laws will affect you.

VA Home Loans for Military Veterans | Free Appraisal

Veterans Day - Free Appraisal OfferAbout Veterans Day

As the United States continues fighting overseas, the population of military veterans continues to increase. According to the most recent Census information there are over 21 million veterans that have served our country. The growing population of veterans struggle to receive proper healthcare and are faced with repeated VA hospital related scandals and deficiencies. There are nearly 4 million veterans with service related disabilities that return to the United States and are in great need of a helping hand from those around them.

Please remember the meaning of Veterans Day and together, let’s honor those who have served our country.

VA Home Loan | Free Appraisal Offer

Here at Riverbank Finance, we take pride in offering zero down VA loans to our military veterans. As with most of our loan options, we offer VA loans with no lender fees and have zero cost loan options. From today through the end of November, the owners of Riverbank Finance will personally pay for the appraisal cost for new VA-eligible home buyers that receive financing through our company.

Disabled Veterans can Waive the VA Funding Fee

For military veterans with a disability rating of at least 10%, the Veterans Administration will waive the VA funding fee.  Additionally surviving spouses of veterans who died in service or from a service-connected disability are also eligible to have the VA funding fee waived.

Michigan Property Tax Exemption

Veterans that have served our country and have disability rating of 100% are eligible to have their Michigan property taxes waived for their primary residence located in the state of Michigan. We would love to help our disabled veterans complete the required paperwork to have their property taxes waived as part of our home buying process.

We look forward to helping you buy a home with no down payment using your VA benefits. Call a VA loan officer today at 1-800-555-2098 to start your home purchase application or request information below:

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Disclaimer: Appraisal program available only to new clients that are approved for VA financing. Riverbank Finance LLC reserves the right to discontinue this program without notice. Not all will qualify. No purchase necessary. Call 1-800-555-2098 to request your VA certificate of eligibility through the Veterans Administration. 

FHA Construction Loans

Construction crew building a home using the Michigan FHA construction loan program.What is the FHA One time close construction loan program?

Conventional construction loans are typically difficult to qualify for and require very large down payments however the FHA has introduced a construction loan program for the average family. Qualifying is easy with flexible credit guidelines and low score requirements. The best part is that a family can build a home with as little as a 3.5% down payment.

Michigan FHA construction loans are one time close mortgage loans that do not require separate construction loans and end loans like a normal conventional construction loan. With a single mortgage a borrower can purchase the land, build the home and not have to worry about an end appraisal or refinance once the house is built. This Construction to Permanent loan program allows a borrower to avoid re-qualifying, reappraising and incurring additional loan closing costs.

Build your dream home with a low down payment with a FHA construction loan!

Benefits of the FHA Construction Loan

compare fha construction loan benefits

There are many benefits to FHA construction loans over other construction mortgage products. One major benefit is that a borrower does not have to pay mortgage payments during the construction. The first mortgage payment is typically 60 days after the certificate of occupancy is issued and the borrower can move into the home.

  • Borrower can use land equity as down payment
  • No payments during construction
  • One time close means half the closing costs
  • Low down payments required of only 3.5%
  • Programs available for low credit scores of 620+
  • Manufactured Homes and Modular homes are Eligible
  • Low Fixed Mortgages Rates
  • Locked in mortgage rate which reduces rate risk
  • Builder/retailer is allowed staged funding draws during construction
  • Closing costs and Fees may be paid by the Builder

Downsides to FHA Construction loans

While the FHA construction loan program is an amazing home loan option it does of course have some downsides. The largest downside is that the borrower will be required to pay up front mortgage insurance which is currently 1.75% of the loan amount. This gets added to the mortgage balance at the loan closing and is paid to the Federal Housing Administration to insure the mortgage. Additionally all FHA loans have monthly mortgage insurance which is similar to conventional loan PMI.

Loan Restrictions Include:

  • Must have a 620+ Credit Score
  • Borrower cannot perform construction
  • Maximum loan amount set by FHA loan limits
  • No Adjustable Rate mortgages available

Summary of the Construction to Permanent FHA Construction Home Loan

The FHA construction loan program opens up the door to home ownership for families in all walks of life. Building your own home may allow you to have the home of your dreams without settling for an existing home. Using the equity in your land or as little as a 3.5% down payment you may be able to build your next home. Our construction program allows for stick built home, modular homes and even manufactured homes.

For more information on a FHA Construction Loan call Riverbank Finance LLC at 1-800-555-2098 or send an inquiry below.

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5 Reasons why Now is the Time for a Cashout Refinance Home Loan

cashout refinance home loan

A Cashout refinance home loan is a mortgage that pays off your current loan by refinancing and provides the homeowner with funds at closing to pay off debt, complete home repairs or simply as cash in hand. Recently mortgage rates fell to the lowest they have been in 16 months. This may make it the right time for you to do a Cashout refinance mortgage on your home. The following five reasons reason make it the perfect time to do a cashout refinance.

1)      Low Mortgage Rates make it a perfect time to do a Cashout Refinance Mortgage.

As noted above, mortgage rates have dropped significantly over the past year and a half.  At the start of 2014, average mortgage rates were between 4.50% and 4.75% for a 30 year fixed rate mortgage according to Freddie Mac’s Primary Mortgage Market Survey (U.S. Weekly Averages). As of October 16th, 2014 Average mortgage rates have now dropped to 3.97% for a 30 year fixed rate mortgage for a prime borrower. This drop in mortgage rates may allow a home owner to save thousands of dollars in mortgage interest over a 30 year home loan by refinancing. With low mortgage rates, a homeowner may be able to receive cash out from the equity in their home and keep their mortgage payment the same or even reduce their mortgage payments.

2) Home Values Have Generally Increased over the past few Years Creating Home equity to Cashout.

Following the mortgage meltdown, homeowners saw the values of their homes plummet dropping as much as 90% in areas like Detroit, MI. For families that had plans of doing home improvements or using the value they have accrued in their home’s equity for college tuition may have missed their opportunity until now. Over the past few years home values have steadily risen year over year is most areas. As home values continue to rebound or even skyrocket in areas like Grand Rapids, MI, now homeowners may finally have the equity to complete their financial goals for a cashout refinance.

Related: Use our home value estimator to research the value of your home and calculate your home’s equity.

3) Many Banks and Mortgage Companies have slowed down Allowing Home Loans to Close Quickly.

In many area in Michigan and the Mid West, home buyers complete their purchases mainly in the warm weather of Spring and Summer. As temperatures begin to drop, homebuyers put their relocation plans on hold until the next season. This cyclical effect of home buying allows banks and mortgage companies to catch up and close mortgage loans quickly in the fall and winter seasons. This may allow you to close your mortgage quickly in as little as 14 days with the right mortgage company.

4) There may be Tax Benefits of Consolidating Debt with a Cashout Refinance.

As you may know, credit cards typically have high interest rates and minimum payments. For some, if you can only afford to pay the minimum payments you may never pay off the credits card loans. An alternative to paying high interest credit cards would be a debt consolidation mortgage with a cashout refinance. You may be able to save thousands of dollars in interest and reduce your overall payments. An added benefit of consolidating debt with a cashout refinance is that mortgage interest is tax deductible whereas you cannot write off credit card interest or personal loans on your tax returns. Speak with your tax professional to see if you are able to benefit from a tax write off with a cashout home loan.

5) Mortgage Programs are expanding Making it Easier to Refinance your Mortgage and receive Cashout.

After the great recession caused by bad mortgage loans, banks and lenders tightened their underwriting guidelines making it very difficult to be approved for a home loan. In general, many banks required credit scores to be 640+ with no credit blemishes in recent years. Now that mortgage companies are becoming more familiar with recent laws and regulations, the industry is seeing expanded credit guidelines allowing homeowners to be approved more easily for mortgage loans. Home loans such as the FHA Mortgage allow homeowners to be approved with as little as a 560 credit score and only 2 years out of a Bankruptcy. With a FHA home loan a homeowner may be able to cashout up to 85% of their homes value to consolidate debt, do home improvements or even get cash back at the closing.

For more information on a Cashout Refinance Mortgage call Riverbank Finance LLC at 1-800-555-2098 or send an inquiry below. Our wide variety of cashout home loans in Michigan may allow you to get the cash you need.

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Map of Average Mortgage Balances by State

In an article released by Business Insider analysts break down the average mortgage balances by state including the US average mortgage balance.  Using statistical information provided by one of the main three credit bureau reporting agencies, Experian’s Decision Analytics, analysts created a heat map demonstrating the hot zones for high mortgage debt.

Ranking in the top five for mortgage debts are Washington DC, Hawaii, California, Maryland and New Jersey all with over $200,000 in average mortgage debts. The US average mortgage balance was $157,154 with only 16 states holding higher average balances. Rounding up the bottom five states for low loan balances are Oklahoma, Arkansas, Indiana, Mississippi and West Virginia with average mortgage debts of $93,195.

See how you stack up against your neighbors with the heat map below:

Map of US average mortgage balance by state

 

Here is the list of average home loan balances by state:

Chart of average mortgage balance state table

 

For more information visit the Business Insider post written by ANDY KIERSZ and LIBBY KANE at: http://www.businessinsider.com/mortgage-balance-state-map-2014-10

Michigan Vacation Home Mortgage | Second Home Mortgage Loan

Michigan vacation home mortgage loanHistorically real estate has been one of the best investments you can put your money in with year over year positive appreciation and tax advantages.  You may already have a place you call home but adding on an investment property may make financial sense.  At Riverbank Finance, we offer second home loans and a vacation home mortgage with low down payments.

Benefits of a Vacantion Home Mortgage

  • Low Down Payments
  • Low interest rates
  • Own appreciating real estate
  • Enjoy tax advantages
  • Save Money on expensive Vacation Trips

Why Michigan is Hot Spot for Buying a Vacation Home

If you are a resident of Michigan or if you have traveled to Michigan you are aware of the unique beauty it has to offer. Michigan has been touting its beauty nationally through its Pure Michigan marketing campaigns. Vacation towns such as Traverse City, Saugatuck and Mackinaw Island have been displayed in TV commercials narrated by Michigan’s own Tim Allen. With its white sand beaches and beautiful Great Lakes, vacationers have traveled across the country to vacation here.

If you already own a home in a Michigan city such as Grand Rapids, Lansing or Detroit, taking a short trip to the lake short to visit your own vacation is a perfect weekend get-away. Ask a Riverbank Finance loan officer how you can buy a vacation home with a low down payment mortgage and a low fixed rate.

How to get a Vacation Home Mortgage in Michigan

If you have been considering buying a vacation home in Michigan the process may be easier than you think.  Even if you already have a primary residence you may be eligible for a second home mortgage loan through Riverbank Finance. We offer some of the lowest rates and down payment options in the industry.

Second Home Mortgage Loan Requirements:

  • 10% minimum down payment
  • 620+ Credit Score
  • 45% or less Debt-to-Income Ratio
  • No Recent Bankruptcies or Foreclosures
  • Verifiable Income

To get more information on Michigan Vacation home loans, call a loan officer today at 800-555-2098 or request information below.

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