- What is a Rate Reduction? How does it differ from a typical refinance or a FHA streamline transaction?
- How is CBC National Bank able to offer free payment reductions?
- Why don’t I have to requalify to participate?
- How do I know that this is legitimate?
- How much can you lower my mortgage payment?
- Will my credit or payment history prevent me from enrolling in the program?
- Why hasn’t my current mortgage company contacted me about this program?
- Why aren’t Rate Reductions advertised?
- Is a rate reduction the same as a typical refinancing?
- What is the difference between an FHA/VA Streamline and the CBC National Bank Rate Reduction Program?
- What is the process? / How can I get started?
1. What is a Rate Reduction? How does it differ from a refinance or a FHA streamline transaction?Although not widely advertised, basic FHA streamline transactions are very common. HUD created the FHA streamline program to allow responsible FHA borrowers the ability to take advantage of improving rates or terms without the burden of undergoing the entire mortgage application process again. FHA has permitted streamline refinances on insured mortgages since the early 1980’s.Here is the distinction. The “streamline” only refers to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The CBC National Bank Rate Reduction Program allows borrowers the reduced documentation via the streamline program, but also the ability to benefit from the savings with an option to not have the routine title and closing fees added to the loan balance.Here is why consumers choose CBC National Bank. Unlike most lenders, CBC National Bank’s FHA Streamline Interest Rate Reduction Program gives borrowers lower mortgage payments or shorter terms, without adding the fees to borrowers’ loan balances.
2. How is CBC National Bank able to offer free payment reductions?
The payment reduction is NOT free. Ultimately, all mortgages charge interest. Borrowers often confuse us paying the title fees on a transaction using our Title Fee Credit (TFC)
as the loan being free. Instead of charging fees upfront, borrowers are ultimately choosing to pay the costs of getting a lower payment over the course of the loan, by paying a slightly higher rate than the rate that requires upfront costs.Considering that there are no prepayment penalties or restrictions on FHA loans, borrowers looking to stay in their home for short periods of time and borrowers that are concerned about their loan balances find theTitle Fee Credit (TFC) a tremendous value. Otherwise, they would be stuck paying higher mortgage payments when paying refinance fees would not be cost justifiable. See the Transaction Comparison
page for more details.
3. Why don’t I have to requalify to participate?
Borrowers go through a lengthy and tedious application process when they initially enter the FHA and VA program. When we assist them, there is no need for the same requalification. The loan is basically the same. The payment is just lower. Credit is often checked as a lender precaution, but HUD does not require that a borrower have a particular credit rating or any minimum FICO score. Obviously, if a borrower is able to pay a mortgage payment, they would be able to pay a lesser payment with ease. HUD is already insuring the mortgage at the higher payment. A loan with a lower payment would potentially reduce HUD’s default risk. Start the process of lowering your payment now!
5. How much can you reduce my monthly mortgage payment?
At CBC National Bank, we will gladly speak with you and give you an unbiased overview of ways you can improve your mortgage. This is helpful to most people that call us. Many FHA and VA borrowers miss opportunities to reduce their mortgage payments, because they lack the resources to identify the opportunities as they arise. We work to provide our clients with the best value and expert loan structuring. No bank can guarantee the lowest rate or fees. However we strive to stay competitive, treat all clients fairly and provide exceptional service.We understand that your overall best interest always comes first. Start the process of lowering your payment now!
6. Will my credit or payment history prevent me from participating in the program?There are two differences. Anyone with an FHA or a VA loan can enroll their loan. Once the loan becomes rate eligible, the borrower can then apply to participate in the streamline program.Enrolling allows us to tell you if your rate qualifies. By enrolling people separately, we avoid having borrowers waste time applying when there are no options available. Never let your overall credit history prevent you from enrolling.
To participate, borrowers must meet the current borrower requirements for FHA streamline loans. However, some borrowers may qualify despite past credit problems. Anyone can enroll, but at the time of application, borrowers can have no 30-day+ late mortgage payments within the past 12 months . Enroll now!
7. Why hasn’t my current mortgage company contacted me about this program?The simplest way to answer this question is with the following question:If your mortgage company already has you paying more each month, what would be their incentive to encourage you to pay less?Mortgage companies make money off interest that borrowers pay each month. The higher your interest rate, the greater their profit. CBC National Bank believes that we can offer competitive rates and still remain profitable. We create programs with borrowers in mind.
8. Why aren’t Rate Reductions advertised?
HUD created the streamline rate reduction program to minimize the amount of HUD foreclosures and the amount of unnecessary interest that consumers pay mortgage companies and banks. Assisting borrowers with rate reductions tend to be far less profitable than a typical refinance for most institutions.
9. Is a rate reduction the same as refinancing?
An FHA Streamline Refinance / Interest Rate Reduction Loan (IRRL) is a unique transaction. There are MAJOR differences between typical refinance and an FHA/VA streamline refinance/interest rate reduction. Traditionally a refinance transaction involves a credit, income, and asset review. A Rate Reduction has a reduced credit, income and asset underwriting process. A rate reduction is a refinance, but the hassles that people associate with refinancing are eliminated.
10. What is the difference between an FHA/VA Streamline and the CBC National Bank Rate Reduction Program?The CBC National Bank Rate Reduction is an enhanced, less expensive version of the FHA/VA Streamline Program. FHA/VA Streamline Programs just allow the borrowers to bypass the appraisal and income documentation process. For a more in-depth explanation.
11. What is the process? / How can I get started?