Florida homeowners that purchase their house using a USDA 502 Guaranteed Loan now can refinance into a lower interest rate. The USDA Pilot and Streamline refinance lets borrowers refinance via approved USDA lenders into a lower interest rate so that they can lower their monthly mortgage payments to more manageable levels.
Those looking to refinance through the USDA —even if they are underwater on their homes — may have the following options. In each option, the borrowers must have a Section 502 Direct or Guaranteed Loan and provide income documentation for all borrowers in the household. The residence must be their primary residence, and properties that were eligible for the loan at their origination that have now become ineligible can still qualify for the refinancing program. All loans will be refinanced at a fixed rate for 30 years and are subject to a 2 percent upfront fee and a 0.4 percent annual fee. The 2% guarantee fee and all closing costs can be put back into the new loan so the homeowner has no out of pocket costs.
Streamlined USDA Refinancing
This option, which is available only for Guaranteed Loans, does not require an appraisal. The new loan amount can’t be more than the principal on the existing loan plus a guarantee fee of 0.5 percent of the loan amount. In addition, the accrued interest, closing costs and lender fees can’t be folded into the new loan. The lender will run your credit report (borrowers with bad credit must have a credit waiver) and will require a debt-to-income ratio of 29/41. This means that the lender prefers that your housing costs don’t exceed 29 percent of your monthly gross income and that your total housing costs plus other debt payments don’t exceed 41 percent.
Non-Streamlined USDA Refinancing
The non-streamlined program, which requires an appraisal, is available for Section 502 Guaranteed Loans. The interest, closing costs, guarantee fee of 0.5 percent of the loan amount, and lender fees can be folded into the loan — as long as the borrower has built up sufficient equity in the house (this is determined by the appraisal). The maximum loan amount can’t exceed the fair market value of the home, which will be determined by the appraisal. The lender will run your credit report (borrowers with bad credit must have a credit waiver) and will require a debt-to-income ratio of 29/41.
USDA Rural Refinance Pilot Program
This program is only available in select states, Florida being one of them! This program is also available to those homeowners with a 502 Guaranteed Loans. If you are refinancing a guaranteed loan, you will not need an appraisal. Your loan to value is not important. All pre-paid interest, closing costs, guarantee fee 2 percent of the loan amount, and lender fees can be folded into the loan. The lender only has to verify that your last 12 months of mortgage payments were made on time. If a credit report is run, the lender can only use the mortgage payments with which to evaluate the borrower. The pilot program does not have debt-to-income requirements. The new interest rate will be fixed at a minimum of 1 percent below the current rate and the loan will be for 30 years.
To find out which Government backed relief plan is best for you, contact us by calling 904-302-6060 or visit http://www.usdamortgagesource.com/usda-pilot-refinance.html Also be sure to read all the helpful USDA refinance FAQ’s here.
USDA Streamline Refinancing Lower Rate FL