Central Coast Lending is a leading broker of mortgage refinance loans on the California Central Coast. Our expert team of loan officers make the process of mortgage finance (or refinance) easy and understandable.
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Mortgage Refinance Overview
Refinance offers home owners the chance to adjust their mortgage from a previous interest rate to a more advantageous level. New rates offer mortgage holders the opportunity to have lower monthly payment, to cut years off the loan duration, and to save thousands from interest payments.
Different loan programs offer different refinance options and rates. For more information, talk to a loan officer to find the rate that makes sense for you. Here, we show some general characteristics of refinance programs, as well as a primer on the FHA and VA Streamline Refinance programs, and the Freddie Mac and Fannie Mae’s Home Affordable Refinance program (HARP and HARP II).
Home Affordable Refinance Program (HARP)
The Home Affordable Refinance Program (HARP) was introduced by the Federal Housing Finance Agency (FHFA) and the Department of the Treasury in early 2009 as part of the Obama Administration’s Making Home Affordable program. HARP provides borrowers, who may not otherwise qualify for refinancing because of declining home values or reduced income (DTI of 65 percent), the ability to refinance their mortgages into a lower interest rate and/or more stable mortgage product. HARP is unique in that it enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. Recently, the FHFA unveiled HARP II, which has modified some of the original specifications to reach more borrowers.
UPDATE: has been renewed through the end of 2015, a two year extension from its December 31, 2013 end date. You can read more about the program extension HERE.
HARP Loan Specifications:
The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to:
- No cash out
- Minimum credit schore determined by automated underwriting system
- Debt-to-income ratio (DTI): 45 percent
- Names on title must remain the same
HARP Borrower Eligibility:
- Be able to demonstrate that they have adequate income to make payments on the loan and meet their other expenses
- Borrowers must be current on their mortgage payments with no late payment in the past six months and no more than one late payment in the past 12 months
FHA Streamline Refinance
With a solid credit history and a record of consistent payments, holders of a FHA loan are eligible for the FHA Streamline process. FHA Streamline refinances are designed to lower the monthly principal and interest payments on a current FHA-insured mortgage, and are often easier than a typical refinance. Here, the client only needs to show the following to refinance the loan:
- Credit Report
- Loan Application
To qualify for the old mortgage insurance premiums associated with FHA Streamline (0.01% upfront and 0.55% monthly), you must have a FHA home loan older than May 31, 2009. Otherwise, the FHA Streamline loan will adhere to the new MI guidelines (1.25% upfront and 0.75% monthly). You must also meet the following requirements to be eligible for a FHA Streamline:
- The mortgage that you want to refinance must be an FHA-insured loan
- The mortgage payment must decrease your loan amount by a minimum of 5%
- You must have made at least 6 payments on your current FHA loan before you can refinance with FHA streamline
- You must be current (i.e., not delinquent) on your mortgage payments
- The primary reason why you want to refinance your FHA loan must be to lower your monthly principal and interest payment
- You cannot tap your equity (i.e., take out cash) if you use the streamline process, except for minor adjustments at closing that are not to exceed $500
Learn more about FHA loans HERE.
VA Streamline Refinance
The VA Streamline Refinance is the most common loan type within the VA loan umbrella, and is officially known as an Interest Rate Reduction Refinance Loan (IRRRL) by the government. The VA Streamline Refinance loan allows you to refinance your current mortgage interest rate to a lower rate than you are currently paying. The Streamline loan is extremely popular because it’s easy to use; once you have already been approved for your initial VA purchase loan, it is relatively simple to lower your interest rate and experience considerable savings.
To be eligible for a VA Streamline loan, you must meet the following requirements:
- Be current on your mortgage with no more than one 30-day late payment within the past year
- Your new monthly payment for the VA Streamline must also be lower than the previous loan’s monthly payment
- No cash-out
- You must certify that you previously occupied the property
- You must have previously used your VA Loan eligibility on the property you intend to refinance. (You may see this referred to as a VA to VA refinance.)
Learn more about VA loans HERE.
We broker mortgage refinance home loans for the Central Coast and throughout the entire state of California. Among others, we supply refinance loans for:
San Luis Obispo County:
Arroyo Grande, Atascadero, Avila Beach, Cambria, Cayucos, Creston, Grover Beach, Los Osos, Morro Bay, Nipomo,Oceano, Paso Robles, Pismo Beach, San Luis Obispo, San Miguel, San Simeon, Santa Margarita, Shandon, Templeton, and surrounding cities.
Santa Barbara County:
Buellton, Carpinteria, Goleta, Guadalupe, Hollister Ranch, Isla Vista, Lompoc, Los Alamos, Los Olivos, Mission Hills,Montecito, Orcutt, Santa Barbara, Santa Maria, Santa Ynez, Solvang, and surrounding cities.
Bakersfield, Delano, Arvin, California City, McFarland, Ridgecrest, Maricopa, Taft, Oildale, Lamont, Rosamond,Rosedale, Greenfield, Lost Hills, and surrounding cities.
Carmel, Del Rey Oaks, Gonzales, Greenfield, King City, Marina, Monterey, Pacific Grove, Salinas, Sand City, Seaside, Soledad, and surrounding cities.