About Government Refinance and Home Purchase Programs

The new FHA streamline program for borrowers who currently have FHA loans more than three years old is starting in just a few weeks. As we have noted in the past, this new program is dramatically more beneficial to borrowers than the previous FHA streamline program because the upfront FHA fee will be waived and the monthly FHA mortgage insurance will no longer be doubling.

As if the launch of this new FHA program weren’t enough good news, add to that the fact that mortgage interest rates on FHA loans are testing all time lows recently. We are hearing of qualified borrowers with excellent credit locking in rates as low as 3.75% on new 30 year fixed FHA loans this week in anticipation of closing in mid June after the new program launches. (Note: rates on FHA loans are lower than rates on HARP loans right now.) If you know of anyone with an FHA mortgage that they got prior to May of 2009 — no matter how upside down/underwater it may be — have them contact us in the sidebar right away. We don’t anticipate this current dip in mortgage interest rates will last long.

With the debt crisis in Europe flaring up again, more and more investors are fleeing stocks for the safety of US treasury bonds. The more investors buy up US treasury bonds, the more mortgage interest rates tend to dip. The latest round of European debt fears has driven mortgage interest rates down to levels that are once again threatening all time lows.

As we have noted before, rates on HARP 2.0 loans tend to be somewhat higher than rates on less risky mortgages. But even at rates slightly higher than other mortgage HARP 2 loans are often great options for those who can qualify. And rates on all types of mortgages have been improving with the yield on the 10 year treasury note dipping again.

Rates on FHA loans are especially low lately — often lower than the best available rates on conventional mortgages. This is especially good news to folks who have FHA loans that are more than three years old because they should be eligible for the new FHA streamline program set to launch in June 2012. Borrowers with VA and conventional mortgages now also have plenty of reason to investigate refinancing right now.

Contact us in the sidebar today to learn more about the available programs and rates while we are still in this historic dip in rates.

We have been getting some questions on what to expect on interest rates for HARP 2.0 loans. The simple answer is that as of May 2012 rates on HARP 2 loans have reportedly been mostly in the mid to high 4’s. Here are some more details:

– If your 1st mortgage is less than 125% of the current value of the home you can get a HARP 1.0 rate. Those rates have been a bit lower than HARP 2.0 loans. HARP 1.0 rates have reportedly been mostly in the mid to low 4s this month.

– Don’t expect rates at 4% or less for a 30 year fixed HARP loan. HARP loans, while subsidized by Fannie or Freddie, are still high risk loans because they by definition are for homes with little or no equity. As a result 30 year fixed HARP loan rates are not the extremely low teaser rates banks love to advertise to lure customers in.

– Freddie HARP loans tend to have higher rates than Fannie HARP loans. Authorized lenders nearly universally report that Freddie is more difficult to work with than Fannie and thus investor demand for Freddie loans is lower than for Fannie loans. The end result is that rates on Freddie HARP loans are routinely as much a .25% higher than rates on similar Fannie HARP loans.

– Rates on non-owner-occupied HARP loans tend to be higher than rates for owner occupied properties.

– The rate and fee hits for lower credit scores are surprisingly minimal on HARP 2.0 loans. In other words people with less than optimal credit can often get the same HARP 2 rates as people with great credit scores.

We’ll post on more quirks and details of Fannie vs Freddie HARP loans soon. But in the meantime contact us in the sidebar to have us look at your specific situation. If you look like a good candidate for a HARP loan we can connect you with an authorized lender who can get you an quote on a HARP loan.