In the wake of the Federal Reserve’s newly announced quantitative easing program, mortgage interest rates have dropped to all time lows again this month. There has never been a better time to refinance.
Please note that the rates borrowers see in the news apply to mortgages where the borrower has plenty of equity and excellent credit. When there is little or no equity or if there are credit problems interest rates tend to be slightly higher. For instance this week rates on 30 year fixed government-backed mortgages for folks with plenty of equity and good credit were coming in at around 3.5% (or even lower in some cases). But in cases where the home is underwater (where the borrower owes more than the home is worth) and the borrower is using the HARP program the risk is higher for the lenders so the rates tend to be higher. Still even in those cases rates are astonishingly low right now. Most HARP 2.0 loans are still coming in at rates in the very low 4’s or even high 3’s this week.
Rates on FHA streamlines have been low too. For people who have FHA loans that were started in the spring of 2009 or sooner, refinance rates have been down in the mid to low 3’s this week with no closing costs added to the new FHA loan. For newer FHA loans streamline rates have been in the mid to upper 3’s.
Beware of false advertising from lenders. Many lenders will advertise rates in the 2’s but won’t mention in the advertisements that rates that low only apply to 15 year mortgages (which have higher payments) or adjustable rate mortgages (ARM’s). If you are looking for a 30 year fixed refinance, rates are in the mid 3’s and higher.
Contact us in the sidebar to learn which government-backed refinance programs are best for your family and to get an estimate.