New refi option for those with FHA loans

There’s a new mortgage refinance option for those with FHA loans that can benefit you even if you’re upside-down in your home.

If you have an FHA loan that closed by spring 2009, the streamline refi program could be for you. Here’s a quick overview of this program, which goes into effect late spring.

• Lowers your rate to 3.875% or 4%
• No verification of income or employment necessary
• No credit check and no appraisal of your home necessary
• You must have been making timely mortgage payments for the last 12 months

Meanwhile, The Los Angeles Times  has a nice write-up on this program for more details.

Beware of resale fees in newer developments

About a year ago, I told you that Wall Street firms had been inserting a new, hidden resale fee into the paperwork when homebuyers purchased new homes from developers.

The firms fronted money to builders so they could meet their infrastructure costs, including roads, sewers and more. By accepting the money, the builders agreed to insert a one percent fee to be paid to them every time the house was sold for 99 years.

If you are looking to buy a home in a neighborhood developed over the last five years, there’s a fair chance this could be one of the clauses. It’s now no longer possible to get conventional financing in a development that has a resale fee clause in the contract. So here’s a two-part warning:

1. If you are buying a new home, make sure it doesn’t have this developer clause. Read through all the paperwork to make that determination.
2. You want a seller disclosure that it does not have a transfer fee. If it does, understand you will have trouble getting financing in the first place. Second, it will forever harm the value you can sell the home for moving forward.