New VA Re-Fi Program Offers Relief For “Underwater” Home Owners
The VA Streamline refinance is a benefit many VA borrowers have not been able to use because they owe more than their home is worth. AlthoughVA does not require an appraisal with this program, most of the lenders offering VA loans do, depending on the current servicer, and most will not lend more than the home’s value.
To specifically fill the needs of these borrowers, we have recently rolled out a new loan program. It provides veterans who are “underwater” with their mortgage relief and an opportunity to take advantage of a low interest rate environment.
Our loan program allows for VA Streamline refinancing up to 150% of the home’s value. This means that VA home owners whose mortgage exceeds the value of their home can refinance with no cash out of pocket to reduce their monthly payment. It does not matter who they are currently making their payment to. This program also enables borrowers to skip 1-2 months of payments, thereby providing extra liquidity to pay down higher rate debt such as credit cards and other unse-cured loans.
Many home owners who have refinanced in recent years may say that it is a frustrating and tedious process, which it can be depending on the loan program and lender you are working with. This is not the case with our VA Streamline program. Neither income nor assets documents are required on this loan. In many cases a VA Streamline refinance may only take two hours of the consumer’s time – one hour to do the initial paper work and another to sign the final documents.
The loan process usually takes less than 30 days. Home owners are required to be current on their mortgage with no payments later than 30 days in the past 12 months. If a VA home owner has been making their payment on time, they should have no problem with an even lower payment. We will verify that the borrower is employed and maintains an acceptable credit rating.
The first step in the process is gathering basic property and borrower-specific information. This can be done on the phone, online, or in person. I meet with clients seven days a week and often in the evenings to accommodate their schedules. Once we have determined that there is a benefit and it makes sense to do the loan, we will sign the initial upfront loan application and associated disclosures. At this time we will pull an AVM (Automated Valuation Model), which determines property value by using mathematical modeling and a database. If an AVM is not available for the property, we will order a drive-by appraisal. As long as the new proposed loan amount is less than 150% of the property value we can proceed. The next step is final loan approval and signing closing documents at escrow. The process is just as easy as it sounds.
Though the VA Streamline program is only for borrowers currently in a VA home loan, we do have another new VA program that allows refinancing from any loan type up to 100% of the home’s value. In the case where there is a second mortgage we can go up to a collective value of 115% by subordinating the second mortgage.
In a rising interest rate environment, it is important to take advantage of these programs right away and lock in a low 30 year fixed rate while still available. As a veteran myself, I am making it my mission get the word out to VA home owners about the new Streamline Refinance we are offering. It is my hope that anyone reading this article will help spread the word to their friends and neighbors. For any questions or to start the process, please call me at (808) 783-5815 or email me at firstname.lastname@example.org.
Mann Mortgage is a member of the Mortgage Bankers Association, Hawaii Association of Mortgage Brokers, National Association of Mortgage Bankers, and Fair Housing and Equal Opportunity (FHEO).