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Commercial Refinancing

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Commercial refinancing may seem complicated at first glance. Here at Stonebriar Mortgage, we strive to make it as easy as possible. In this week’s blog post, we are here to help you understand how to make the right choice when you refinance. Refinancing is a crucial step to accomplishing the financial goals of small businesses and real estate investors. Our team is here to discuss commercial mortgage refinancing options and programs available in California and Dallas, Texas.

Using Commercial Refinancing Programs

Many owners face ballooning commercial loan rates, especially after the mortgage crisis earlier this decade. These borrowers are often asked to pay a large sum in a short amount of time. For this reason, they need to refinance quickly or gain fast access to cash. You can even refinance one property to pay off a ballooning rate on another. Obtain a statement from your lender of the ballooning rate and submit it as a deal to broker the best option.

Refinancing Tips and Tricks for Commercial Loans

You will need to demonstrate what collateral you have to obtain financing for your deal. Obtain details on the type of property, its location, its size, and its value. Rent rolls will also be requested if your building has a lot of tenants. Speak to the lender and obtain exactly what they need in order to approve your refinancing. By making things easier for the lender, you’ll ensure the process is faster and more favorable.

Cash-Out Refinancing for A Commercial Loan

Cash-out refinancing is a type of loan used by commercial borrowers. Many have great reasons to use this system. Some use the cash to pay off other debts and begin to consolidate their mortgages. Be sure to be clear exactly how much money you need. Your cash may come from borrowing against the equity that is currently in another property.

When using cash out refinancing, you are essentially borrowing money you already paid, including interest. However, in some situations it makes the most sense to create cash flow from what you have already invested. For example, if you are using the funds to purchase a second property. If this is something you’re considering, be sure to include the agreement of sale. In other situations, the cash can help you make needed repairs to an existing property. Be sure you have detailed cost estimates to submit with your refinancing package.

Many Great Ways to Use Commercial Refinancing

Other commercial borrowers use refinancing to generate working capital for another business. Perhaps you have a great investment opportunity in front of you and need access to the cash quickly. Whatever your reason, Stonebriar Mortgage is here to help. Take advantage of the great commercial refinancing options available today in California and Dallas Texas.

Cash-Out Refinancing

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Do you need extra cash flow to pay off major debts, repair your home, go to college, or make other upgrades to your house? At Stonebriar Mortgage, we help Dallas, Texas and California residents with various types of cash-out refinance options for their home. Cash-out refinance is used when people lend against the equity already built in their home. This week, we are here to tell you about various cash-out refinance options. Read on to learn more about why people might use them.

The Nuts and Bolts of Cash-Out Refinance

It is important to understand that completing a cash-out refinance means you will start a new loan. You will have to pay closing fees and may end up with very different loan terms than with your current mortgage. The current mortgage will not necessarily go away, either. However, if you have paid off more of your home and need extra cash flow, then this may be worth the cost. Do you need to make repairs you cannot afford or want to make another major investment in life? You can compare the costs of using a cash-out refinance instead of using other options to finance you needs.

Using a Cash-Out Refinance Loan

When you choose to use a cash-out refinance, make sure the benefits outweigh the costs. Look into other financing for your needs, such as student loans, debt restructuring, store financing, and other options. Interest rates may be lower or higher with the various choices. If you have a lot of high interest debt, then using a cash-out refinance loan may help you pay it off faster. In some cases, the interest on your new loan will be lower. However, you may be able to balance transfer your debt to a new credit card and this may cost less than a new home loan.

The Pitfalls of Using a Cash-Out Refinance Loan

As stated, there may be cheaper ways to finance your needs. For example, you may need to install upgrades or replace a major appliance in your home. It may be cheaper to look at in-store financing options. Some retailers offer 0% financing and credit cards that come with rewards programs. There are no closing costs associated with opening a new credit card, and usually no fees. In a cash-out refinance, fees are a certainty.

You will also take out equity that you had built in your home, essentially borrowing money you already paid, including interest. However, in some situations it makes the most sense to create cash flow from what you have already invested. For example, if you are using the funds to purchase a second home.

Stonebriar Mortgage is here to help homeowners in the California and Dallas, Texas markets consider a cash-out refinance. Contact our offices today!

HARP 2.0

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HARP 2.0

H.A.R.P stands for Home Affordable Refinance Program. Several years ago, the government extended the program, creating HARP 2.0. Intended to help struggling homeowners after the mortgage crisis, HARP can be used to refinance homes with declining values. Typically, the value has declined well below what is owed on the mortgage.  Borrowers can refinance into a more affordable and sustainable home loan rate. Stonebriar Mortgage breaks down the HARP 2.0 program for Dallas, TX and California homebuyers in this week’s blog post.

Am I Eligible for HARP 2.0?

You may be asking yourself: this program is quite old, am I still eligible for HARP 2.0? Below are the basic eligibility criteria, you may qualify if:

  • The loan is owned or guaranteed by Fannie Mae or Freddie Mac.
  • The mortgage has been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage was not refinanced under HARP previously (unless it is a Fannie Mae loan that was refinanced under HARP from between March and May of 2009).
  • The current loan-to-value (LTV) ratio is greater than 80 percent.
  • You are current on your mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months.

The program known as HARP 2.0 expired in December 2018, however similar programs exist. The Federal Housing Agency has launched a Fannie Mae High Loan-to-Value refinance option and a Freddie Mac Enhanced Relief Refinance (FMERR). These programs extend HARP with slightly different requirements.

What Can I Do with These Refinance Relief Programs?

Through these various relief programs, homeowners can obtain lower interest rates (lowering monthly payments), shorten the term of their loan, and modify their loan from an adjustable-rate to a fixed-rate mortgage. There is no minimum credit score required, which has eased restrictions for struggling borrowers. Many people are saving thousands per year by taking advantage of these programs. Some are getting rates that are 30% lower than in the past.

If you choose to shorten your loan term, your monthly costs may go up, but you will build equity in the home more quickly. By applying to restructure or refinance the mortgage, you will have to go through an application and approval process. You may have to pay closing costs in the end to get paperwork completed.

How Do I Apply for Relief?

Start applying for relief by calling your mortgage company. Obtain information on all loans you currently have and gather your financial documentation for the application. You do not have to continue struggling with bad loans. Stonebriar Mortgage is here to help Dallas, Texas and California homeowners some relief. Contact our local offices today for more details!

Jumbo Loan Refinancing

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In past topics, we covered jumbo loans, which are typically used to finance high-value homes and larger than standard mortgages. Many people get approved for jumbo loans that have high rates in this somewhat riskier mortgage. If you have a jumbo loan, you may want to refinance and restructure as you pay it off.  Check today and see if you can get better interest. This week, Stonebriar Mortgage is here to educate homeowners throughout California as well as Dallas, Boerne, Fair Oaks Ranch, Helotes, and San Antonio, TX about jumbo mortgage loan refinancing.

How Do I Qualify for a Jumbo Loan?

Jumbo loans are also known as non-conforming loans because they exceed limits established by government agencies. For this reason, someone may need to undergo more scrutiny to seek approval for a jumbo loan. These loans are not approved for government backing, so you will also need a good financial history to qualify to refinance a jumbo mortgage.

How to Refinance a Jumbo Mortgage

Qualifying to refinance a jumbo mortgage may prove very difficult and will come with additional fees, since some jumbo loans are quite large. The size of the loan means that interest payments can really add up over time, so it may be worth the effort to refinance and save. You can do a financial projection to see if the initial costs warrant the savings. If you decide to go for it, prepare to provide ample documentation.

Many lenders desire to see a good credit score and loan-to-value in order to approve a jumbo loan refinance. Some people have adjustable-rate mortgages and are looking to save on interest, others apply in order to pull out cash from the home. Your debt-to-income ratio must be under 43%. You will also need to show proof of other sources of cash and financial reserves. There may also be limits on the number of properties you can hold mortgages on in order to qualify. The team at Stonebriar Mortgage is here to assist homeowners in The Colony, Flower Mound, Lucas, McKinney, TX and beyond through this process.

Gathering Documents to Refinance

In the process of refinancing a jumbo loan, there is ample documentation that you will need to gather. You will want at a minimum:

  • At least two years of tax returns.
  • At least two years of W-2s.
  • At least one to two months of pay stubs and bank statements, including ample evidence of commissions earned (if needed).
  • If you are self-employed, you will need to provide profit and loss statements for your business.

Finding the Right Time to Refinance

Be sure you look closely at your credit, debt-to-income, and loan-to-value in order to learn if it is time to refinance your jumbo mortgage loan. Qualified professionals are here to help. Stonebriar Mortgage works with Allen, Frisco, Highland Park, Plano, and Prosper, TX homeowners for Jumbo Loan Refinancing. Please contact our office with any additional questions.

What is FHA Streamline Refinancing?

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Loans provided by the Federal Housing Administration often come with great rates and benefits. However, many existing FHA customers could refinance their loan and save even more! With a new process aimed at quick approval, the FHA has come out with a great refinancing product. This week, Stonebriar Mortgage teaches Dallas, TX and California homeowners about the benefits of FHA Streamline Refinancing.

How FHA Streamline Refinancing Works

The process of FHA Streamline Refinancing works by eliminating much of the paperwork and appraisals that are often required to refinance a loan. Certain eligibility requirements must be met. For example, you should be current on your loan payments over the last 12 months. Decent credit will also improve your odds; you will likely have this if you are in good standing on a current FHA Mortgage.

The process is so easy. Some people can even apply right over the phone, without needing professional assistance. Use caution, as you will create a new loan in the process. Ensure that the new debt-to-income ratio is something you can handle.

How to Qualify for FHA Streamline Refinancing

If you are looking to save money on your current FHA Loan payments, and are in good standing, the process to qualify for streamlining is easy. Here are some of the eligibility requirements:

  • Your current mortgage must be FHA-insured; a conventional loan will not qualify for the streamline procedures.
  • You must be current on your payment history and have had the FHA mortgage for at least 210 days.
  • Lenders may disqualify you if you have been delinquent on payments, however, some will overlook this if your mortgage is newer and the payment was under 30 days late.
  • Lenders like to see a benefit to applying for streamlining. Examples of a benefit include the ability to make payments more easily or to reduce the term of the loan. In addition, the new interest rate should be lower.
  • Many say that the new interest rate, Mortgage Insurance, and principle payments may not exceed the existing mortgage by more than $50.

Although you cannot cash-out from this refinancing option, many say the cash you save on payments is just the same as a cash-out refinance. In addition, lenders are not allowed to include closing costs in the mortgage under a streamline process. We have shared general FHA guidelines in this week’s blog post. Please note that different lenders may have updated their procedures and processes.

Stonebriar Mortgage will help you and your family work through the process of refinancing your loan. We have experience working with Dallas, TX or California customers to reap the many benefits of the FHA Streamline Refinance. Contact our friendly staff with questions today!