About Government Refinance and Home Purchase Programs

The mortgage markets didn’t take Fed Chairman Ben Bernanke’s comments last week well. After Bernanke said that if the economy continued to recover the Fed would like to start tapering off its $85 billion per month bond and mortgage-backed securities purchase program (aka QE2), the markets reacted quickly and the result was mortgage interest rates shot higher Monday. Since then rates have slowly moved lower again though. With any luck this downward trend will continue for several weeks.

If you have considered getting a refinance now is the time to get started. It usually takes a month or more to get to the finish line on a refinance so with any luck rates could be better by a month from now. Keep in mind that while rates might drift lower again this summer, the writing is on the wall that they will be trending higher over the next year or two so getting refinances going now is prudent. Contact us in the sidebar to learn more.

Housing prices are increasing all across America in 2013. That is good news for sellers and buyers. For sellers, it is obviously good news because they can make more on their home sale. But for buyers it is also good news because the asset they are purchasing is likely to be worth more later on than it is now.

Housing has historically been a reliable investment because home values have traditionally slowly increased over time. Of course the bursting of the housing bubble in 2007 proved that housing won’t always go up. But six years later the housing market appears to be back on the march upward again. That means people who buy homes now can feel relatively confident that their home will be increasing in value in the years they own it.

Interest rates for government-backed mortgages are still very low by any historical measure. So if you have considered a home purchase, now is an excellent time to get the process started. Contact us in the sidebar to get more info on the available government backed home purchase mortgage programs.

The Fed held its June meeting yesterday and afterwards Chairman Bernanke confirmed the rumors that had been swirling around for weeks — the Fed is planning to take its foot off the gas later this year when it comes to compressing mortgage interest rates. The markets predictably reacted quickly and as a result mortgage interest rates have moved higher. It appears that the days of 30 year fixed mortgage rates breaking all time lows may be gone for good, barring a reversal from the Fed of some kind.

The good news is that rates on 30 year fixed mortgages are not too far from all time lows still. But there is a growing consensus among pundits that the trend is moving higher and that we could see those 30 year fixed rates rates back up in the 5’s by the end of this year. If you are interested in refinancing or purchasing a home contact us in the sidebar right away.

After dipping to near record lows again in April, mortgage interest rates have jumped to levels not seen in more than a year. Borrowers who are hoping rates will dip down toward those record lows again will probably find themselves disappointed. With hints from the Federal Reserve that their aggressive treasuries and mortgage-backed securities purchase program may be tapering soon, mortgage interest rates are up about half a percentage point in the last month or so. And odds that rates will move higher going forward appear higher than the odds of rates significantly lowering again.

The good news is that rates are still very, very low from a historical perspective. Just a few years ago the average 30 year fixed mortgage was in the low to mid 6’s. This month the average 30 year fixed mortgage is still in the low to mid 4’s. The important thing for borrowers to recognize is that the longer they wait to refinance or purchase a home, the greater their risk will be of missing these historic low rates entirely.

Contact us in the sidebar right away to get an estimate on a government-backed mortgage. Rates are still very low by any historical measure but there is no telling how long these low rates will be available.

Homeowners who are looking to refinance have a bad habit is missing record lows on interest rates. Some miss the lows out of pure bad luck. But some miss them because they misunderstand the process of refinancing a mortgage. Getting to the point where you are ready to lock an interest rate often takes weeks after estimates are sent, applications are started, disclosures are sent and signed and returned, and other documents are gathered. People who watch rates daily and decide to start an application after rates have dipped often find that they are not ready to lock their rate in until weeks later anyway. A better approach is to get the refinance process started and watch rates as the file moves through the processing and underwriting queues. That way borrowers can lock for 30 days or sometimes 15 days and get even better rates. There is nothing wrong with getting your loan ready to go and then locking and closing late in the process — especially if rates are trending lower as they have been the last few days after spiking last Tuesday. The value to that approach in times like these, where rates appear to be inching lower again, is borrowers will be ready to close as soon as rates dip again (assuming they do dip again).

If you have been considering a refinance contact us in the sidebar today to get more information and/or an estimate. Rates are unpredictable but there is value in being ready to jump at the right time.