The things people ask us most, answered straight.
A hard pull checks your actual credit report and shows up on your history. That doesn’t happen until you’re ready to move forward. The initial conversation is just a conversation.
No. First-time buyers, repeat buyers, refinancers – all welcome, repeat buyers, refinancers, and people with complicated income situations. The loan type changes. The process doesn’t.
Bring it to us. Different lenders have different overlays and risk appetites. What one bank declines, another may approve, especially through the broker channel where we access dozens of wholesale lenders. We’ll tell you honestly if there’s a path.
You’ll see a full breakdown before you commit to anything. Our fees are transparent, and in many cases, lender credits cover part or all of the cost. No hidden charges. No surprise line items at closing.
The total cost to refinance depends on a number of factors like your lender and your home’s value. Expect to pay about 3% – 6% of the total value of your loan. For example, if your loan is for $300,000, then your refinance closing costs will typically range between $9,000 and $18,000.
You may not have to pay those costs out of pocket. In some cases, you can get a no-closing-cost refinance so you don’t have to bring any money to the table. Be aware that closing cost is then paid over the life of the loan in the form of a higher rate.
If you’re trying to decide whether you should you refinance, be sure to consider market trends, current interest rates, your credit score, and the amount of equity you’ve built. You can use our mortgage refinance calculator to figure out your break-even point to determine how long it will take to recoup your refinance expenses and begin saving money.
You also need to know how refinancing differs from other mortgage options, like loan modification and second mortgages.
No, a second mortgage is not the same as refinance. When you refinance, a new mortgage replaces your existing loan. With a second mortgage, you take out another loan using your home as collateral, leaving you with a second loan payment each month. While second mortgages typically require lower closing costs, they usually have higher interest rates than a refinance. Second mortgages also come with more risk. Since you’re using the home as collateral, you could lose the home if you can’t keep up with your payments.
When you complete a loan application, we use a soft credit pull to review your credit without impacting your score. Once you’re approved and ready to move forward with a refinance, we’ll complete a hard credit pull with your authorization.
There are conventional loan programs that allow for a down payment as little as 3%, so if you qualify for these programs, then yes! In fact, one of the biggest home-buying myths out there is that you need a 20% down payment to buy a home; you absolutely don’t.
Take note, however, that if your down payment is less than 20%, a private mortgage insurance (PMI) payment will be added to your monthly mortgage payment, until you have paid off 20% of the mortgage amount.
It depends on your unique financial situation and goals when buying a home. One loan type is not necessarily “better” than another; it’s really more about what loan type fits your current situation and needs. If you have relatively good credit, stable income and a little bit more saved for a down payment, a conventional mortgage loan might be the right fit for you.
If you are an active U.S. service member, veteran or surviving spouse (where a VA loan might be advantageous); or unless you are specifically looking for a home in a more rural setting (where a USDA loan might be advantageous). But as always, your HappyDog mortgage loan advisor will be able to go through all this with you and help you decide which type of loan fits your specific situation best.
One of the major motivations for refinancing from an FHA loan into a conventional loan is to drop the requirement of paying monthly mortgage insurance on top of their mortgage payment. If this is your aim, it may be better to wait until you have 20% equity in the home, because if you don’t, a conventional mortgage loan will still require you to pay mortgage insurance until you do have that 20% equity stake.
Another major motivation for refinancing from an FHA loan into a conventional mortgage loan is when someone has improved their credit score or debt situation a great deal during their first years as a homeowner. If your credit score has gone up considerably or if you have paid off some debts recently, you might now qualify for a significantly better mortgage rate on a conventional loan, which could mane a conventional loan more advantageous over the life of the mortgage.
Keep in mind, though, that current market mortgage rates also have a great deal to do with what rate you may get on a refinanced mortgage. So, just because your situation has improved does not always mean now is the right time to refinance from one mortgage type to another. A HappyDog mortgage advisor will be able to help you find out what benefits you may reap from refinancing from FHA loan to conventional loan and when might be the best time to do so.
There may be several ways to accomplish this, depending on your financial situation and where you are buying or refinancing your home.
Owing taxes* is a separate matter from having a tax lien. Tax debt is simply owing money to the IRS and/or a state, but a tax lien means that your taxes went unpaid long enough to trigger collection actions. If you have an IRS lien on your income or assets, it greatly diminishes your chances at getting approved for a conventional mortgage. It does not automatically nullify your eligibility for an FHA loan, but it does nullify eligibility for a conventional mortgage through Fannie Mae.
According to FHA guidelines, the FHA generally will not insure more than one mortgage for any borrower, noting an exception for transactions in which an existing FHA mortgage is paid off and another FHA mortgage is acquired. There are other exceptions as well. One of those exceptions is provided for relocations.
If the borrower is relocating and re-establishing residency in another area not within reasonable commuting distance from the current principal residence, the borrower may obtain another FHA mortgage and is not required to sell the existing FHA-financed property. Other exceptions may be approved when a family has increased in size or for a borrower who is vacating a jointly-owned property. Exceptions are processed on a case-by-case basis.
If you put down 10% or more as a down payment, you can wait for the FHA mortgage insurance to fall off your loan, which happens after 11 years. If you put down less than 10%, the only way to get rid of the monthly mortgage insurance payments is to refinance into either a Conventional or VA loan, if you qualify for either.
It depends! For people with better or more established credit profiles and low levels of debt, it may be advantageous to choose a Conventional loan over an FHA loan, even if the interest rate is the same or similar, due to other advantages associated with Conventional loans. For those who may not have as much established credit, a lower credit score or who may have slightly higher levels of debt, an FHA loan might be the cheaper option over the life of the mortgage loan, or it may be an entryway into a home loan for some who may not qualify for Conventional. As always, though, a HappyDog mortgage loan officer will be able to go over your specific situation more closely in a phone consultation or online, and then advise which option would be advantageous for you.
An FHA 203(k) loan is a type of FHA loan that is specifically for bundling the costs of necessary renovations or home improvements into the mortgage loan at the time of purchase or refinancing. It is a great option for people who have found a home that needs a little love before it is 100% move-in ready. Or, some borrowers choose to take out an FHA203(k) refinance loan later, when certain updates to the home become necessary.
At HappyDog we offer FHA Limited 203(k) loans, which can provide up to $35,000 (including a contingency reserve) to help make non-structural home improvements or renovations, such as updating a kitchen or bathroom, replacing flooring, purchasing new appliances or repairing the roof. We also offer an FHA Standard203(k) for homes that may need more than $35,000 in renovations, or for homes where the necessary renovations may be more structural in nature.
PROS:
Predictability is the big plus. You know going into your home mortgage loan exactly how much interest you will pay over the life of the loan. In the early years of the life of your home mortgage loan, when your monthly payments will go mostly toward that interest rather than toward the loan principal, you are able to shorten the term of the loan at will by making periodic additional payments against the principal, if you are able and if you wish to. If you choose a 15-year fixed-rate loan over a 30-year fixed-rate loan, you will own your home in half the time and, generally speaking, for less than half the total interest cost of a 30-year fixed-rate mortgage loan.
CONS:
If mortgage rates fall after you purchase your home, your mortgage rate will not go down along with the market rates. Also, the initial rate you qualify for on an adjustable-rate mortgage loan (ARM) may be lower than the rate you would qualify for on a fixed-rate home loan.
HappyDog offers fixed-rate loan terms of 10 years, 15 years, 20 years, 25 years and 30 years, depending on loan type.
The term “conforming” only comes into play if your home mortgage loan is a Conventional loan and means that the home mortgage loan in question meets the standards set by the Government Sponsored Entities (GSE) Fannie Mae and/or Freddie Mac for insuring the loan. If you are hearing the word “conforming” regarding your home mortgage loan, it means you are dealing with a conventional mortgage loan.
That, of course, depends on the underlying conditions of the real estate and mortgage market, which vary according to a number of factors, including but not limited to seasonal shifts, shifts related to the U.S. economy in general and shifts caused by certain far-reaching world events. In comparison to an adjustable-rate mortgage, though, you may find that the introductory (sometimes called a “teaser”) rate you qualify for with an adjustable-rate mortgage loan is lower than the rate you qualify for in a fixed-rate mortgage loan.
But when the introductory rate period is over (typically after 5 years, 7 years or 10 years, depending on loan type), if you chose an adjustable-rate loan at the time of purchase, your home mortgage loan’s interest rate would then be subject to fluctuations according to the volatility of the real estate and mortgage market. It could go up; it could go down. What that may mean for the total interest cost of the home mortgage loan is something that you really should speak with your HappyDog mortgage advisor about.
The short answer is no, you will not. Even if you put no money down, there is no private mortgage insurance (PMI) when you use a VA loan to buy your home. You will instead have to pay a VA funding fee, which you can pay up front at closing or it can be rolled into and financed as part of the total loan amount.
In some cases, the seller may elect to pay or the buyer’s and seller’s real estate agents may negotiate to have the seller cover the VA funding fee.
The funding fee is calculated as a percentage of your loan amount and is based on what, if any, down payment is associated with the loan. It also factors in whether the veteran associated with the loan is a first-time VA mortgage recipient or has used the VA loan option more than once.
The VA loan allows eligible borrowers to include SOME closing costs into the total loan amount. As mentioned above, the VA funding fee is one of the VA loan closing costs that you can choose to roll into the total loan amount. The other fees that are lumped into closing costs are not eligible to be rolled into the total loan amount, but you and your agent may be able to negotiate additional seller or lender concessions to bring the upfront cost of the loan down.
Before you are granted a VA home loan, you must first obtain a valid Certificate of Eligibility (COE). Your COE is based on your length of service or service commitment, duty status and character of service. Veterans, active-duty personnel and eligible surviving spouses can request their COE from the VA, or your HappyDog mortgage advisor can look it up when you are ready to apply.
Your COE tells your lender whether you have your “full entitlement” available, which means you can buy a home with zero down, or “partial entitlement,” which means you would have to make a down payment for your home purchase. Click here for another resource regarding VA loan eligibility.
Yes. You can take out a VA mortgage even if you have used one before. However, if you haven’t paid off your last VA home loan, you may only have a partial entitlement remaining or no entitlement remaining. You would need to pay off the current loan to restore your full entitlement to avoid loan limits and realize all the other great benefits of the VA mortgage loan on that second loan.
You can use a VA loan to buy land as long as there is a home on the property. The VA loan rules do not limit the amount of land you can buy, but keep in mind, that similar properties in the area where you purchase must be used for residential purposes only.
For example, if you are thinking of buying a 10-acre plot with a house on it, but all the other 10-acre properties near yours are income-producing farms, you may not be able to use a VA mortgage loan for your purchase. But if you are purchasing in a rural area dotted with similarly sized hobby farms, you would more likely be in the clear.
It is possible to use a VA loan to build a house, but few lenders offer this option. VA construction loans require buyers to jump through many more hoops to qualify, including finding a VA-approved builder and then making sure the building plans qualify for VA financing.
The minimum VA loan credit score to qualify at HappyDog is 580. For any borrowers whose credit score ranges from 580-599, an additional underwriting approval will be required, which just means that in many cases, additional documentation may be required during the mortgage process. As always, the higher your credit score, the more favorable the loan terms you will see. But there is more to your VA loan experience than your credit score! Make sure you are asking your HappyDog mortgage advisor these questions as you are going through the mortgage process as well.
