FHA Streamline and BK7

[road2freedom]

A mail flyer caught my attention the other day so I have been looking into the FHA Streamline program. Here's a little background:

 

Our loan originated back in 2003 and was in my name and my wife's name.

The payment has never been missed or late.

We qualify based on the requirements I've read. Between payments and MIP we'd save about $300/mo, which is pretty significant given the amount.

I filed BK in 2009. Tried to reaffirm but the bank didn't accept so my wife is still liable for the loan and my responsibility is discharged.

 

If i filed BK and we are in a ride through, can we still streamline?

 

Would it be in both names or just my wife's, or is there an option?

 

Should I just stick with the current provider or look elsewhere (no problems with the current provider)?

 

Should I consider an ARM? I ask because we are paying down the equity loan and plan to move within 3 years. We have no intention on being in this place by the time it adjusts, but I recognize there is some risk. I'm not sure the difference in rates though or if it justifies the risk.

 

Thanks for any input!

[ugghh]

I would think if you want to be a part of the refinance you have to be 2 years post discharge (which I think you are ). If your wife wants to refinance by herself she can do it whenever she likes as long as she qualifies by herself.

 

 

If it was me I would shop the best rate.

 

I can't answer your question on the ARM. I would have a hard time thinking of a time where an ARM would be too beneficial with the way the rates are right now, but I am sure the mortgage brokers might be able to give you good advice on that.

[road2freedom]

Yep, almost 3 years post discharge.

 

I tried searching online and the only thing I found was that in order to strip one person off the lien the remaining person would have to qualify based on income and credit. No idea if that applies to my situation since I'm not on the loan but still on the lien. Otherwise, neither are necessary with at least 12 months of recent positive repayment history.

 

I would probably rather it be in just her name "just in case" but I don't think it will matter in the grand scheme of things. If she has to go through qualification I'm not sure she would qualify. It would probably be a good idea to get some positive mortgage reporting for me anyway.

 

I'll try to find the name of my old broker. Otherwise... Brian - where ya at?

[jop3]

A mail flyer caught my attention the other day so I have been looking into the FHA Streamline program. Here's a little background:

 

Our loan originated back in 2003 and was in my name and my wife's name.

The payment has never been missed or late.

We qualify based on the requirements I've read. Between payments and MIP we'd save about $300/mo, which is pretty significant given the amount.

I filed BK in 2009. Tried to reaffirm but the bank didn't accept so my wife is still liable for the loan and my responsibility is discharged.

 

If i filed BK and we are in a ride through, can we still streamline?

 

Would it be in both names or just my wife's, or is there an option?

 

Should I just stick with the current provider or look elsewhere (no problems with the current provider)?

 

Should I consider an ARM? I ask because we are paying down the equity loan and plan to move within 3 years. We have no intention on being in this place by the time it adjusts, but I recognize there is some risk. I'm not sure the difference in rates though or if it justifies the risk.

 

Thanks for any input!

 

A streamline refinance needs to be in the names of the same borrowers on the original loan, so both of you would have to be on it, regardless of the BK. With it being 3 years ago, that shouldn't be a problem. If you remove a borrower, she does have to qualify with her credit and income.

 

Also, on a streamline, it's same to same. So, if you're in a 30 year fixed, you stay in a 30 year fixed, otherwise it's a full credit qualifying refinance.

[ugghh]

Yep, almost 3 years post discharge.

 

 

I am coming up on 2 years post discharge... Man time flies. The BK was very dreaded by me, but I have found that I am a LOT farther along than I could of ever been if I didn't file, and a lot more credit savvy.

 

Good luck on your refi! If I was not trying to buy a new house in September I would be planning my refi.

[luckydriver]

if you intend on moving in 3 years you are one of the candidates for an ARM but it's still risky. I've heard of 5/1 and 7/1 so those may give you more peace of mind.

 

i guess you need to figure out the difference i payments and see what you really would save per month to see if the risk is worth it.

[luckydriver]

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Edited June 13, 2012 by luckydriver

[road2freedom]

A mail flyer caught my attention the other day so I have been looking into the FHA Streamline program. Here's a little background:

 

Our loan originated back in 2003 and was in my name and my wife's name.

The payment has never been missed or late.

We qualify based on the requirements I've read. Between payments and MIP we'd save about $300/mo, which is pretty significant given the amount.

I filed BK in 2009. Tried to reaffirm but the bank didn't accept so my wife is still liable for the loan and my responsibility is discharged.

 

If i filed BK and we are in a ride through, can we still streamline?

 

Would it be in both names or just my wife's, or is there an option?

 

Should I just stick with the current provider or look elsewhere (no problems with the current provider)?

 

Should I consider an ARM? I ask because we are paying down the equity loan and plan to move within 3 years. We have no intention on being in this place by the time it adjusts, but I recognize there is some risk. I'm not sure the difference in rates though or if it justifies the risk.

 

Thanks for any input!

 

A streamline refinance needs to be in the names of the same borrowers on the original loan, so both of you would have to be on it, regardless of the BK. With it being 3 years ago, that shouldn't be a problem. If you remove a borrower, she does have to qualify with her credit and income.

 

Also, on a streamline, it's same to same. So, if you're in a 30 year fixed, you stay in a 30 year fixed, otherwise it's a full credit qualifying refinance.

 

Thanks! That makes sense. I've run into the same thing that others have... some banks want to run credit and others don't. Its not a big deal in the grand scheme of things but it sounds more and more like a regular refi than anything streamlined the more I read.

[road2freedom]

Yep, almost 3 years post discharge.

 

 

I am coming up on 2 years post discharge... Man time flies. The BK was very dreaded by me, but I have found that I am a LOT farther along than I could of ever been if I didn't file, and a lot more credit savvy.

 

Good luck on your refi! If I was not trying to buy a new house in September I would be planning my refi.

 

Thanks It does seem to go by pretty fast when you aren't paying attention. I really had no intention of refi-ing but will consider all options that free up more cash to go towards this ridiculous equity loan we have.

[road2freedom]

if you intend on moving in 3 years you are one of the candidates for an ARM but it's still risky. I've heard of 5/1 and 7/1 so those may give you more peace of mind.

 

i guess you need to figure out the difference i payments and see what you really would save per month to see if the risk is worth it.

 

Good point. The numbers that WF gave me made a difference of about $25/month for the first 5 years. It's not a lot... but i do bounce between freeing up that much more $$ vs the risk that we might get stuck here. Realistically, I don't think we will be here at all but I never thought I'd be filing BK7 3 years ago either.

[luckydriver]

300 a year saving? personally no way would i do an ARM then. plan for the worst..you staying there. years ago with higher rates it paid..my 1st home was a 2/1 buydown and i got qualifies at 5 3/8..never could have gotten in at the 7 3/8 existing rate then.

[road2freedom]

Eh.. I can tell I'm rusty at this. Forgot to request a GFE from Wells. Doh!

[Brian B The Loan Professor]

Does Wells also own the second? I agree saving $25 a month is not worth the risk

[road2freedom]

Wells has the first. Nationstar has the second.

[road2freedom]

I was able to get the terms worked out with WF, which seems to be the easiest since they have the mortgage and escrow already and offered a decent rate. They claimed they will not need a credit check or appraisal, so we will see. I specifically asked the originator about the BK to make sure it wouldn't be a problem, especially since they were technically IIB (because they didn't accept the reaffirmation), and was told it shouldn't be a problem. I got the URLA and HUD addendum today via email to get the process rolling. I'll let you all know how it goes.

[road2freedom]

Here's my GFE if anyone in interested in weighing in. It was sent to UW yesterday for initial approval. I did go with the ARM and am taking a slightly higher rate to offset most of the closing costs. The fees seem a little high, but seem about right from what else I've found. Any suggestions?

 

Amount 117K (minus principal from two more payments before close)

Term 30 years

Rate 3.625% FHA 5/1 ARM

 

Origination $655.00

Upfront MI $11.70

Title Ins $1190.06

Flood Survey $19.00

Survey $500.00

Tax Service $78.00

Govt Recording $276.50

Transfer Tax $643.87

Escrow Deposit $1339.12 (will be offset with existing deposit/balance)

Interest for 17 days $197.54

Insurance $637.19 (??)

 

Here are fees listed that I was told would not apply at closing

Appraisal $455.00

Credit Reports $11.00

 

Total reduction in payment is estimated to be about $260/month.

 

One thing I don't quite get is the escrow deposit and insurance being separate line items. The escrow deposit shows that it includes taxes, insurance and other. Is that normal?

 

Another minor concern is if it will be approved for the ARM since the current loan is fixed. The ARM cap would exceed the current 6% by quite a bit so I'm not sure if that will disqualify it from the streamline process. If so, I can deal with the fixed rate (4% including the lender credit for closing costs).

 

I know the ARM was not recommended. It was a difference of .375%. We will be out of this house in 3-4 years though come hell or high water (especially high water ).

[road2freedom]

We're approved!

[road2freedom]

Got a call this weekend. All of our docs were accepted... just waiting on title stuff.