About Government Refinance and Home Purchase Programs

The world financial markets did not take last week’s British vote to leave the European Union well. Stock markets all over the world tumbled Friday and Monday as the shock waves of the so-called Brexit vote reverberated around the world. The immediate result was investors fleeing stocks and racing to the relative safety of bonds. That rush to buy bonds pushed the yield on the 10 year T-Note lower, and as usual, mortgage interest rates mirrored that move lower. Mortgage interest rates dropped between 1/8 and 1/4 percent between Thursday and Monday. Rates have remained lower so far this week but with a rebound in the US stock markets on Wednesday we’ll see where rates end up for the rest of the month.

The takeaway from this is that now is an excellent time to research a mortgage refinance or a home purchase. Rates are near historic lows and there are several government-backed mortgage programs available. Contact in the sidebar for guidance regarding refinances or on our home purchase page for assistance qualifying for a home purchase loan.

In the wake of the 2007 housing bubble bursting, adjustable rate mortgages (ARMs) got somewhat of a bad rap. The problem in the early 2000’s was too many borrowers were purchasing homes with ARMs without understanding how they work. The result was their ARMs began adjusting higher years down the road and unprepared borrowers found themselves unable to make their payments. But ARMs can be very useful loans when understood and utilized properly.

Paying a premium for 30 years mortgages

While 30 year mortgages are currently the most popular form of mortgage, they come at a cost. There is a premium, in the form of a higher interest rate, to be paid for the guarantee of keeping a rate fixed for 30 years. For homeowners who keep their mortgage a over the course of decades, that premium is well worth the security of a long term fixed rate. But the reality is that most people sell their home or refinance within 5 years of getting their mortgage. So most folks get a higher rate for the right to have a fixed rate for 30 years but then end up selling or refinancing a couple of years later anyway.

Who should get an ARM?

Folks who feel fairly confident they will sell their home in the next 5-10 years are excellent candidates for ARM mortgages. Rates on ARMs are significantly lower than rates on 30 year mortgages so refinancing to an ARM (or purchasing a home with an ARM) can lead to huge interest savings.

Contact us to get a quote on a government-backed ARM loan

If you think there is a good chance you’ll sell your home in the next 10 years contact us today to get an estimate on a refinance to an ARM. Rates on ARM lows are surprisingly low and a refi to an ARM could save you a ton of money over the next few years before you sell your home.

There was some question leading into yesterday’s Federal Reserve announcement whether the Fed would raise its short-term interest rate or not. The answer came back as a “no” for now. The Fed cited mixed economic reports in recent months in their decision to hold off on a rate hike. The Fed is looking for more clear signs that the U.S. economy is healthy and growing before hiking rates again, and there is no sure way to know when that will happen. Most pundits are forecasting that it will likely be September at soonest before a rate hike might be on the table again.

All of this means we can expect nice low mortgage interest rates for another couple of months at least. That means now is a great time to look into a refinance or a home purchase. With home values continuing to increase across the country, cash out refinances are becoming popular again. Increasing home values are also making homes more attractive as investments. Contact us today to get more info on available refinance and home purchase programs.

The jobs report that came out about a week ago came in with a much lower number of new jobs created than analysts were expecting. While unemployment numbers are staying relatively low, the number of new jobs created in the economy was troubling to the financial community. The immediate result of the report was a pullback in the stock markets and a dip in the yields for government bonds. That dip in bond yields, as usual, correlated with a small dip in mortgage interest rates. So mortgage interest rates are looking good right now.

If you are considering a refinance or a home purchase, now is an excellent time to get the process started. Contact us in the sidebar for for refinance information, or on our home purchase page for info on home purchase mortgage programs.