Ask the Right Questions Request Correct Information Provide Accurate Quotes Refinance Types Know where to find guidelines Explain options amp benefits Refinance Loan Types VA IRRRL VA Cash Out Refi ID: 556681
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Refinances
Ask the Right QuestionsRequest Correct InformationProvide Accurate QuotesRefinance TypesKnow where to find guidelinesExplain options & benefitsSlide2
Refinance Loan Types
VA IRRRLVA Cash Out RefiFHA Streamline RefiFHA Cash Out RefiUSDA streamline Refi
Conventional Rate/Term
Conventional Cash Out
Reverse MortgageSlide3
Ask Questions
& Take Notes!Goal(s) for Refi – See ReasonsType of Current Mortgage
Current Interest Rate
Is there a 2
nd
Mtg
or HELOC
What’s Your Value?
Are There Any Late PaymentsSlide4
What’s
Your Rate?DO NOT ANSWER THIS QUESTION! YET…Be the expertSell Service & Expertise
Discuss goals & scenario
Present & Explain the options
What’s your mortgage rates?
articleSlide5
Reasons to Refinance – Not Just About Rate!
Know Their MotivationCombine mortgagesARM to fixed rateHELOC to fixed rateVA to conventional to free entitlementConsolidate bills
Home improvements
Pay income taxes
Increase cash flow
Lower payment
15 year to 30 year
30 year to 15 year
Cash for down payment on 2
nd
home
Cash out for RV
Reverse refi for no payment
Business purchase
Allow for college & retirement fundsSlide6
Sell Importance
of Providing Docs to You“So that I can provide you with very accurate numbers up-front on your refinance, I need for you to send me a few simple items. It will then allow you to make a very informed decision.”HOI Dec Pages-Renewal Date & PremiumMost Recent Mortgage Statement
HUD/CD from Last Closing
County & Town Taxes?
Note from closing (needed up front if VA, FHA, USDA)Slide7
VA Cash Out
Anything other than IRRRLUp to 100% LTV on PrimaryFunds for most purposesPrice as Refi Cashout in OB
No reduced funding fees for LTV
Funding fee waived if exempt
Requires VA appraisal
Requires Termite Report – Vet can pay forSlide8
VA IRRRL
Must have existing VA loan.50% funding fee, unless exemptNo appraisal requiredNo income but full 1003
May finance normal costs
Rich must run test before lockSlide9
VA IRRRL Process
Input a complete 1003Do not list any income, but do fully complete employmentOnly list the mortgage as a liabilityProvide Mortgage Only Credit ReportGet the figures as accurate as possible in ItemizationDo not run AUSProvide copy of the Note (OVM loans are available in Encompass)Copy of the dec pages of the insurance policy(ies)Current or most recent property tax billEmail to Rich Bernarde to perform a test to make certain the time to recover the cost of the refinance worksDO NOT ATTEMPT TO LOCK UNTIL RICH HAS NOTIFIED SECONDARYSlide10
FHA Non-Credit Qualifying Streamline
RefinanceImportant Max Loan CalculationBorrowers should expect to bring money to closingBase loan may not exceed the original principal balance, minus applicable refund of the UFMIP, plus the new UFMIP that will be charged on the refinanceClosing costs, pre-paids, & unallowed items in payoff must be paid by borrower and/or lender creditLender Credits help a lot – lowers cash to closeMay only include the following in the financeable payoffOutstanding principal balanceUp to 60 days of interest
1 month of monthly MIP
Must have a current FHA loan
1.75% funding fee
Mortgage only credit report
No AUS
No income listed on 1003
No appraisal, use FHA value
Primary residence only
May subordinate existing loan up to 125% of original value
Benefit test worksheetSlide11
FHA Cash Out
RefinanceUp to 85% LTVPrimary residence only1.75% Funding FeeNormal PMI for LTV’s, even 80%
Requires Appraisal
5% more LTV than conventional
Good rates for 600’s scoresSlide12
USDA
Streamline Refi(coming soon)Must have existing USDA No cash outNo appraisal required
Reasonable costs & escrows included in loan
No AUS
1% funding fee & .35% annual feeSlide13
Conventional
Rate/Term RefinanceCan pay off any loan typePrimary, 2nd home, NOO
Must receive < 2% or $2000 cash out to be limited
cashout
Only for paying off 1
st
mortgage & reasonable costs & escrows
Exception – purchase 1
st
& 2nd
Up to regular LTV’s
May waive escrows 80% or less
Requires appraisal
Can subordinate 2
nd
/ HELOC’sSlide14
Conventional
Cash Out RefinanceCan pay off any loan typeOr just all cashPrimary = 80% LTV
2
nd
Home = 75% LTV
Investment = 75% LTV
May waive escrows 80% or less
Requires appraisal
Watch price hits!Slide15
Reverse
Mortgage RefinanceCall Bob MoyerNC & SC Reverse Loan OfficerLTV depends on agePrimary residence onlyYou get paid 50 bps for referral
Cash for any reason
No payments required
Appraisal required
Use as income stream
Purchase available too
Cell: 910-520-9504
Wilmington Office
Set up a meeting with
Bob to learn how to use this great tool
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OVM Early Pay Offs
Watch your dates!Refi of OVM loan could result in large EPO fees & refund of all moniesGeneral rule = 180 days after closingAlways ask Alan for the specific dateSlide17
Watch Price Hits!
Choose cash out when applicableInclude 2nd mortgage/heloc in LTV/CLTVPrevent extensions – lock 45
Low loan amounts
Higher LTV’s for cash outSlide18
A Few More
Questions to AskUp-FrontWhen did your last mortgage payment post?Are your property taxes paid?Appraisal copy?
If Conv < 80% LTV, do you want to escrow?
Property type?Slide19
Cut Costs
on Your EstimateReissue Rate Title InsuranceLender CreditTry No Points
Good attorney w/ low costs
No final inspection, termiteSlide20
Funding
DatesPrimary Residence3 day rescission (waiting) periodSundays & Federal holidays don’t countMust fund on a weekday
Second Home/Investment
No rescission period
Can fund on same day as closingSlide21
Use Right Pay Off
Don’t use the credit report!Watch FHA Payoffs!FHA only gives payoffs thru 1st!If received after 1
st
, will add 1 month of interest & MIP
Allow time after funding to get payoff to lender by 1st
Use Mortgage Statement
Be safe until actual payoff…
Take balance
Add a month of interest
Add a month of PMISlide22
Get Escrows Right – Different Than Purchases!
Insurance(s)Include all insurancesKnow renewal dateIs 1 year premium due?Figure months of escrows Count payments made through due date Subtract from 12, Add 2 for cushion Property TaxesDetermine most current taxesAre there city taxes?
Are taxes due? Sept – Dec
Figure months of escrows
Count payments made through due date
Subtract from 12, Add 2 for cushionSlide23
Escrow Example
Insurance = $1200 / yearTaxes = $2400 / yearOur first payment 12/1/16HOI due 8/3/16
Taxes due / not paid yet
Current insurance and/or taxes due
Escrow set up based on due datesSlide24
What happens to my current escrows?
Expect a refund of any funds to be mailed w/in 30 days of payoffRefund is yours since we set up a brand new escrow accountIdeas for refundPay extra principal payment
Put in savings
Spend itSlide25
Should I Lock?
How does this statement make you feel?“I am willing to risk my rate going up 1/8% for the chance my rate can go down another 1/8%. So if rates improve I save $15 per month, but it would cost $15 more per month if it goes up”NO ONE can predict the market!Here is what has been happeningExpected market movers coming upQuicker to go up than down
Are you happy with the numbers?
Answer the question to the right
Don’t like = lock
Risk taker = float & I will keep you updated on the marketSlide26
Tell Borrowers,
DO NOT…Stop making paymentsLet others pull creditDelay in providing documents
Start renovations
Open new debtsSlide27
Any Questions?Slide28
Thank You for Attending!