Santa’s Gift, FHA Streamlined Re-finance Loans

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I would like to refinance my FHA loan. It is 6.75%. I have heard that interest rates are as low as 4.5. My friend said that the lower rates are only given to people that are purchasing. Is this true?

Re-fi Rhonda

Dear Rhonda,

A lot of people think that the lower rates only apply to home- buyers. I checked with Ryan Rivera at Goldmine Financial. He assured me that the lower rates apply to purchases and refinances. In fact FHA has a new streamlined refinancing program that does not require appraisal, income or asset verifications. If you have an existing FHA loan and have not been late on any payments, you should qualify to refinance at today’s lower interest rates.

Ryan is hoping that conventional lenders come up with a similar program. I think that it makes sense to adjust the interest rate on an existing loan if the borrower is in good standing. Paying for an appraisal and submitting reams of paper work to qualify for a loan when one already has a proven track record seems redundant!

Give yourself a Very Merry Christmas present by contacting your FHA lender today and get going!

Dear Sue,

My wife and I would like to rent our house out and get in on the REO boom! I have seen deals that are just too great to pass by.

I heard that banks wouldn’t let you buy a house if you already have one. There must be a way around that rule. Any ideas?

Anxious Andy

Dear Andy,

If you have 25% equity in your current residence you can rent your house out and purchase another house with as little as 3 1/2% down FHA. If you provide a rental agreement, the rental income will assist in qualifying you.

Some lenders limit the number of financed investment properties. FHA will allow three plus your residence. I have heard of one lender allowing up to ten properties.

If you turn your residence into an investment property make certain that you do your tax planning well in advance. If you have lived in the property for at least two out of the last five years you can sell it and receive up to $500,000.00 in tax- free gain. If you choose to keep it as an investment property, you will be able to exchange it in the future tax deferred. Good tax planning is a matter of good home dollars and sense!