The Two Step Loan
Situation: A husband and wife were selling their condo to purchase a larger home for their growing family. They had great income; however, the wife was on maternity leave and her income could not be used to qualify. Since they had to count both the old and the new mortgages, the husband’s income wasn’t enough to qualify for both homes. Their application was rejected by their bank and that’s when they came to Stewart & Soss Mortgage.Solution: Andrew saw an opportunity to utilize the guidelines of the FHA program allowing for a non-occupant co-borrower. The husband’s parents were willing to co-sign, but didn’t want to be on the hook for the life of the loan. Since the wife would soon be back from maternity leave and the old primary residence would soon be sold, we knew that the FHA loan would serve as temporary financing until they could refinance into the couple’s names and take the parents off of the loan.
Results
Due to the short-term nature of the first FHA loan, we recommended an interest rate that generated a large lender closing cost credit. Three months later, we refinanced the loan into a conventional loan at a lower rate, took the parents off of the loan and added the wife. Not only did they end up getting the best loan, the short-term loan saved them more than $12,000 in closing costs.
Getting StartedDue to the short-term nature of the first FHA loan, we recommended an interest rate that generated a large lender closing cost credit. Three months later, we refinanced the loan into a conventional loan at a lower rate, took the parents off of the loan and added the wife. Not only did they end up getting the best loan, the short-term loan saved them more than $12,000 in closing costs.
Call us today at 408-295-2355 to request a free, customized refinance rate quote or to receive a free, no-obligation consultation on refinancing options.
