If you have bought your house in the last few years with an FHA loan, chances are that you can take advantage of lower interest rates by refinancing through the FHA streamline refinance program.

And if you live in Arizona and have bought your house in the last couple of years, chances are that you owe more on the mortgage than your house is currently worth.

Can you still take advantage of lower interest rates and refinance even if you owe more on your mortgage than your house is now worth?

You can with the FHA streamline without appraisal refinance program.

Last fall, HUD changed the guidelines on the FHA streamline no appraisal program and now if you are going to do an FHA streamline without appraisal, you can’t finance your closing costs into the loan. I thought this meant that FHA streamlines were pretty much dead — until interest rates went lower than I thought possible.

These changes now mean that anyone who wants to do a FHA streamline is going to be bringing in money to close your FHA loan under the FHA streamline no appraisal program — unless — interest rates drop significantly.

And interest rates have dropped to historic low levels.

Which means that you can now do a FHA streamline refinance without an appraisal and have it still make sense financially.

So if you are in the situation where you want to lower your interest rate and monthly payment but are worried that you can’t refinance because you owe more on your mortgage than your home is worth – don’t worry.

Just ask your loan officer about the FHA streamline without appraisal program.

More information about the Arizona FHA streamline refinance program

Home ownership is a still an aspiration for Americans, even amid economic woes. The credit crunch and anticipation of a spike in interest rates complicates the home buying process.
Smart buyers capitalize on the market’s shortcomings by thinking of ways to save money on their mortgage. There’s no use in making whimsical decisions or listening to one lender. Buying a home easily ranks as one of the biggest investments of your life.

Don’t just shop homes, shop lenders too. Doing so shows you ways to save on your mortgage, and every penny counts. Seize every money-saving opportunity.

To help you save your hard-earned money, consider these tips:

Be a credit expert. Lenders look at your credit score to help assign an interest rate to your mortgage. You’re at a serious disadvantage if you’re one of four people whose credit report is erroneous. Inaccuracies may block you from getting a mortgage, and will make your interest rate soar.
You’re responsible for meticulously picking apart your credit report. If you find mistakes, document them clearly so you can make a case to the credit agency. Do not let inaccuracies ruin your credit score and mortgage terms. Otherwise you will pay for it.

Choose a loan type that suits you. Most conventional mortgages require down payments of up to 20 percent. Paying that 20 percent up front likely means you won’t have to pay private mortgage insurance every month.

However, a few government loans eliminate hefty down payments and PMI. Qualifying veterans and active-duty military members have access to the VA home loan program, which greatly reduces or removes down payments. The Department of Veterans Affairs insures these loans that are loaded with financial benefits. USDA loans serve mostly rural homebuyers, but like VA loans they often feature no money down.

Buyers who saved money for a down payment may be better off going for a conventional mortgage. Nevertheless, there’s no harm in finding out for which government-backed programs you qualify.

Find a favorable loan length. Go for the shortest mortgage life that you can afford. First-time homebuyers spend years paying off the interest before they get a chance to chip away at the principal. You can get 15- or 30-year fixed-rate mortgages, while most adjustable rate mortgages run 5-1 and 7-1.

With interest rate increases imminent fixed-rate mortgages may be best, but it depends on how much money you have now and how much you’ll be making. Regardless, always shoot for the shortest mortgage. It will save you money in the long run. For example, financing $80,000 with 7 percent interest costs $42,000 less with a 20-year mortgage than with a 30-year one.

Pay in advance. Make an effort to put an extra $100 each month toward your monthly payment. No matter what these little extras save thousands in the long run, but might cost you in the short run assuming your mortgage has prepayment penalties.

Making these payments shorten the life of the mortgage and save you money. The savings for a 20-year, $100,000 mortgage with 7 percent interest are considerable. You’d save $20,000 and trim the mortgage by four years. When you send the extra payment, tell the mortgage holder that it goes toward the loan principal.

Befriend your lender. Do not settle for a lender who fails to work with you or doesn’t do everything to save you money. Be suspect of lenders who ignore your questions. It seems like common sense, but some prospective homebuyers get stuck with questionable lenders.

No one can predict the future when it comes to retirement especially as we look at real estate, mortgage rates, savings rates or the stock market. While there are experts can anyone really predict with any great degree of accuracy what’s going to happen? Personally I don’t think so.

But based on past performance, one of the best investments for retirement is an Individual Retirement Account – IRA. There are many types of IRA’s and one of the first questions I know I asked when I started looking at them was which is better: Roth vs. Traditional IRAs.

What are the differences between them? Which one is better for you? Although I can’t tell you which one to choose, I can give you a mortgage guy’s rundown on what I know about each one to help you make your own decision. After you read this, your next step ought to be to call a financial planner or tax professional to fill in the gaps from what I have written about here.

Let’s start with Traditional IRAs

Basically, a Traditional IRA is a tax-deferred retirement account. That means contributions to a Traditional IRA may be tax deductible, depending on your income.

One advantage of the Traditional IRA is that, because the money is invested before taxes are paid on it, it potentially allows you to lower your tax bracket at the time of investments. Another advantage is that, when you retire you usually make less money and therefore the taxes you have to pay on your withdrawals will be less. Also, the money grows tax free until you withdraw it.

Here are a few more facts about the Traditional IRA:

• Income limits – Everyone is eligible to own a Traditional IRA, but there are limits on tax deductions you can take.

• Withdrawals – You can start withdrawing from your IRA at age 59 1/2, and your withdrawals will be taxed as regular income. You will pay a 10% penalty for early withdrawal, although there are exemptions to this rule.

• Required minimum distributions – You must make withdrawals starting at age 70 1/2.

Disadvantages of the Traditional IRA include the required minimum distribution, which must be taken whether you need the money or not, and the fact that it isn’t easy to know in advance what your tax rate may be in retirement.

Now, let’s look at the Roth IRA

While the Traditional IRA is tax deductible, the Roth IRA is tax exempt. That means that, while contributions to the Roth are taxed, withdrawals made during retirement are tax-free. Another advantage is that there is no required minimum distribution.

• Income limits – Unlike a traditional IRA, the Roth has income limits that limit who can participate in the program. Income limits can change every year. You will need to check with your financial planner to see whether you exceed the Roth IRA income limits in any given year.

• Withdrawals – The minimum age to withdraw from a Roth IRA is 59 1/2. The principal can be withdrawn at any time without penalty, however if the interest is withdrawn early there can be penalties. One exemption to early withdrawal penalties is if the IRA owner uses the money as a down payment on a first home (I have had several mortgage customers take advantage of this program feature to buy a home). This is true for both the Roth and Traditional IRA.

So which one is better? Well, there are pros and cons to each. I can’t tell you what is going to be more advantageous to you, so maybe the best course of action would be to discuss it with a financial planner or tax professional.