Refinance options

Hello all, great forum here, have really learned a lot.  I'm getting divorced and am looking at different refinance options to put the mortgage into my name alone.  Here's how it's set up now.

1st lien = 105k conventional Fannie, 2nd lien = 8k, home value approx. 125k, CLTV approx. 90%.  My broker is saying our lender will allow us to include the second mortgage in the refinance as a no cash out loan and I'm looking to roll in the closing costs which would put me at around 93% CLTV.  I was told we can't use the DU Refi + because you're not allowed to drop or add any borrowers with that program and as I said the main reason for the refinance was to drop my wife's name from the note.  As a result he said we're going to have to go with an FHA loan but I'm not liking the Upfront Premium charged by FHA very much. 

Are there any other conventional loan options out there for this?  Is it possible to recast and remove a person from the loan? 

Thanks in advance.

Ralph

Ralph,

With the limited information it sounds like the FHA option is the best way to go.  In regards to quilifying without the exwife i would refer you the fannie mae website https://www.efanniemae.com/sf/mha/mharefi/.  Hope this helps.

Voyage Home Loans

Mike Kim

Ralph, if it is a no cash out you can look at possibly doing a single premium MI loan. Just like with FHA, you finance an upfront mortgage insurance premium but there is no montly premium. The premium is usually tax deductable (talk to an accountant). If you can't do that option, FHA is it unless you served in the military then you can look at a VA loan.

Thanks for the responses guys.  Bob, it seems like we keep running into problems with the LTV/CLTV for conventional loans in Michigan.  All the MI companies are restricting coverage to 90%.  How is that handled with the single premium MI loan and how do i see if i'm qualified?

Thanks!

Ralph

Ralph Meyers:

Thanks for the responses guys.  Bob, it seems like we keep running into problems with the LTV/CLTV for conventional loans in Michigan.  All the MI companies are restricting coverage to 90%.  How is that handled with the single premium MI loan and how do i see if i'm qualified?

Thanks!

Ralph

if you're base loan amount is at 90% LTV, then you can finance the single-pay PMI premium into the loan so that you won't have monthly PMI.  The single-pay PMI premium is not calculated into your LTV...

Only problem I see - I'm not aware of PMI companies issuing PMI when combining two loans.  My lender stopped doing that months ago, and I'm assuming that's an industry-wide decision by the MI companies...

As for getting PMI when combining two loans...we have not given up on that and I am with a major national lender. This assumes that the 2nd mortgage was purchase money.

You are probably running into a 5% ltv reduction based on your local market. Sounds like FHA is the answer.

Jason

Just wanted to follow up and let everybody know I decided to go with an FHA loan.  The appraisal came back in lower than I had anticipated so that was the only option.  But I'm comfortable with that option and am ready to be done and move forward. 

Thanks to all.

Ralph

best of luck

Ralph,

First, you would not be able to do the Refi + program anyways as you cannot pay off a second mortgage with this program, it must be subordinated so that products is not viable for that reason.  If the 2nd mortgage was used to purchase the home, then you could do a standard conventional loan and not deal with FHA.  Outside of FHA, we do work with a portfolio lender that will lend up to 90% of the property value as a cashout loan with no PMI at all.  The rates are typically in the 6's on a fixed rate but you would not have the 1.75% upfront and the monthly pmi that FHA carries.  Of course, with this scenario, you would have to show up at closing with the dollar amount needed to get down to 90%.  If the second mortgage was used to buy your home, a conventional mortgage would be the way to go.  Hope this information helps.

Ralph,

Best of luck and hope things went well with the FHA option.

Voyage Home Loans

Mike Kim