One last option for a borrower who does not meet the criteria for a HARP loan is to contact their current loan servicer and request a loan modification. Often times when you contact your servicer, they say you are not eligible for a modification, but don’t give up. Request a supervisor to make sure that you have the opportunity to explore all options available to you.
Another area of savings often overlooked is your homeowners insurance. There is no better time to shop your insurance than when you are refinancing your home. We have seen some of our customers reduce their insurance costs by hundreds of dollars per month just by changing carriers. Other areas to look at are your deductible, the major systems of the home (electrical, roof, and plumbing), and your coverage amount. Just make sure that you remain in compliance with your lender’s minimum insurance requirements.
With the HARP product if you have private mortgage insurance, you must keep it in place when you refinance. However, if you are doing a non-HARP refinance and your loan-to-value ratio is 80% or less, you will be able to drop your private mortgage insurance on your Fannie Mae or Freddie Mac loan. FHA has also recently authorized a reduced mortgage insurance premium. The reduction took effect on June 11, 2012. FHA lowered its Upfront Mortgage Insurance Premium (UFMIP) to just .01 percent and reduced its annual premium to .55 percent for certain FHA borrowers.
With all of the programs available, rates at historic lows, and the real estate market starting to rebound, now is the time to take advantage of the opportunities available to lower your monthly debt before it’s too late.
Sal A. “Joe” Nunziata is currently the Chairman and Co-CEO of FBC Mortgage, LLC. Prior to co-founding FBC Mortgage, LLC, Mr. Nunziata was the SVP/ District Manager for First Horizon Home Loans, a New York Stock Exchange listed company, from October 2003 until November 2005. Mr. Nunziata is also a member of the Young Presidents’ Organization.
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