About Government Refinance and Home Purchase Programs

The holidays and government-backed mortgage lending have a rocky relationship. The problem is that even when authorized lenders are at full strength, completing a refinance normally takes about three weeks. But the holidays always cause additional delays. First there are all those actual holidays that reduce the number of business days in November and December. Add to that the extra time processors and underwriters normally take off and you are often looking at weeks added to the process of completing a mortgage transaction. For those reasons, if you were considering looking into refinancing your mortgage at the start of 2011 it would probably be wise to start your investigations now.

Further, some banks are holding off on foreclosures until January. When banks get back to foreclosing on homes at the start of 2011 that could further depress housing values throughout the country. That in turn could reduce the amount of equity you have in your home. In cases where the equity is tight already waiting too long could cause troubles.

So if you have been thinking about refinancing while rates are still near historic lows we recommend you get a jump on the post-holiday crowd and contact us in the sidebar right away. Our counselors can help you figure out which programs are available for your situation. Getting the ball rolling now could save you time and headaches in January.

Interest rates on government-backed mortgages are still near the recent historic lows. However they have been slowly inching higher for a few weeks now. The trend continued this last week with average rates moving slightly higher. If you have considered looking into a refinance the time to investigate is now before the record low interest rates go away for good. Contact us in the sidebar to learn which programs apply to you.

Interest rates on conventional and government-backed mortgages were slightly up last week over earlier in November but they have held steady since then. Rates on 30 year fixed, 15 year fixed, and even ARM’s are still hovering near their 50 year lows but signs are pointing to them rising pretty dramatically in the not too distant future. To learn what programs might work for your family just fill in the contact form in the sidebar while rates are still scraping along near the bottom.

After dipping to the lowest rates in more than 50 years, interest rates on government backed and conventional mortgages bounced higher this week after the Fed announced details of its latest quantitative easing plan. We get this from a WSJ blog report:

mortgage rates jumped to 4.46% for an average 30-year fixed-rate mortgage, up from 4.28% in the previous week, the Mortgage Bankers Association reported on Wednesday…

The MBA attributed the increase in rates to stronger economic data and “lingering uncertainty regarding the structure and impact” of the Federal Reserve’s new round of debt purchases

Even after the recent shift, interest rates are still near historic lows. If you have considered refinancing we recommend you fill in the “contact us” form in the sidebar right away before rates get significantly higher.

If you have been considering a refinance to take advantage of the lowest mortgage interest rates in 50 years there is now another reason to contact us sooner rather than later. Analysts are predicting home values across the US will slide even further in the next year. This means that homeowners with not much equity now may find themselves underwater (owing more than the home is valued) this time next year. Here are some excerpts from a recent article on the topic over at HousingWire:

Standard & Poor’s analysts believe home prices will drop between 7% and 10% through 2011, erasing any improvements prices have recently made.

Home sales, which plummeted after the homebuyer tax credit expired in April have continued to lag. Pending home sales, which preclude existing home sale data, dipped 1.8% in September before the market goes into a winter many expect to be bleaker than usual. With this lack of demand, inventories should grow, according to S&P, while prices drop.

“Low mortgage rates will likely continue to encourage refinancing, but their influence on home buying activities has been limited due to the weak housing market and a lack of demand,” S&P credit analyst Erkan Erturk said.

After holding steady for a couple of weeks reports are coming in that mortgage interest rates have recently dipped again. We get this from a recent HousingWire report:

The 30-year, fixed-mortgage rate decreased after a stable two weeks, to new record low at 4.07%, according to the Zillow Mortgage Marketplace weekly update.

Zillow said the current 15-year, fixed average rate is 3.51% and the rate for a 5-1 adjustable rate mortgage is 2.91%. That type of mortgage maintains a steady rate for five years and then is adjusted annually thereafter.

Fill in the contact form in the sidebar to learn which programs you can participate in.

Sooner or later mortgage interest rates will shoot higher. But the good news for borrowers is they didn’t move significantly higher this week. If you have been considering looking into a refinance contact us in the sidebar. Rates on government backed mortgages are still the lowest they have been in more than 50 years.

The Mortgage Bankers Association released its forecast on mortgage interest rates recently and the verdict was that rates, including interest rates on government backed mortgages, are likely currently near their bottom and will be rising in the near future. If you have considered refinancing we recommend you contact us to look into your options now before rates head back up.

Here is an excerpt from a recent MarketWatch piece:

Mortgage rates may be as low as they’ll get — rates are on course to rise, slowly moving toward 5% by the end of next year, according to the Mortgage Bankers Association’s economic forecast, released Tuesday at the group’s annual convention here.

The group predicts rates on the 30-year fixed-rate mortgage will average 4.4% in the fourth quarter of 2010, increasing to a 4.7% average in the first quarter of 2011, and climbing to 5.1% by the end of next year. That’s barring any “blockbuster” announcement from the Federal Reserve next month, said Jay Brinkmann, chief economist of the MBA.

Another week, another new shocking low on mortgage interest rates, including the rates on government-backed mortgages. We get this from a recent WSJ piece:

Longer-term mortgage rates declined the past week, with the average rate on 30-year fixed-rate mortgages furthering its all-time low for the third consecutive week to 4.19%, according to Freddie Mac’s weekly survey of mortgage rates.

The 30- and 15-year fixed-rate mortgages and the five-year adjustable-rate all sit at their record lows, with Freddie tracking the 30-year since 1971, the 15-year since 1991 and the five-year since 2005. Freddie said that using data from the Federal Housing Administration, the last time the 30-year was this low was April 1951.

Fill in the contact form in the sidebar here to learn more about the government-backed mortgage programs that might apply to your family.

A new law in California now prevent banks for going after people who short sell their homes in the state for the difference between the loan amount and the sales amount. We get this from a recent HousingWire piece:

California Gov. Arnold Schwarzenegger signed a state bill into law Oct. 1 prohibiting mortgage holders from pursuing deficiencies after a short sale is accepted.

Before S.B. 931 was signed, distressed borrowers who sold their homes for less than the owed amount were still in danger of owing the debt left over, or the deficiency. Many lenders routinely granted deficiency waivers, but now it is required by law.

California pre-foreclosure sales, often short sales, increased 8% in the second quarter, according to RealtyTrac, which tracks the data.

With any luck more states will follow suit. Selling short is a useful compromise that allows banks to get the fair value of the home while helping consumers avoid a foreclosure on their credit report.

While the steep declines in mortgage interest rates seem to have halted in recent weeks the good news for borrowers is that rates have also not bounced significantly higher yet. That means mortgage interest rates are still hovering around the 50 year lows they hit this summer. If you have been considering a refinance contact us by filling in the short form in the sidebar. We can assist you in getting refinance estimates or point you in the right direction for other government-backed mortgage programs.

As we mentioned in an earlier post, the fee structures for FHA mortgage insurance are officially changing on Oct. 4, 2010. The upfront mortgage insurance fees for getting into an FHA loan are being cut by more than 50% but the monthly mortgage insurance fees (sometimes called PMI) are almost doubling. Here is a bit from a recent LA Times article on the topic:

On new low-down-payment FHA-insured loans originated on or after Oct. 4, the annual premium will rise to 0.9% of the loan amount from 0.55%. At the same time, though, the upfront premium will be lowered to 1% of the loan amount from 2.25%.

And because most borrowers choose to finance the initial fee as part of the loan amount, the overall effect will be easier on the checkbook — for a few years, anyway.

FHA loans will be less expensive in the short run but more expensive the longer one keeps the FHA loan. This is because the monthly mortgage insurance payments remain on FHA loans permanently. Of course because FHA loans allow one to refinance up to 97% of the current value of the home and allow for credit scores as low as 580, they are still the best refinance option for many people with little equity or less than stellar credit. Keep in mind that borrowers could potentially refinance out of their FHA loan and into a conventional loan with no PMI a few years down the road, assuming they get to at least 20% equity. So with rates at historic lows now, refinancing into an FHA loan could make a lot of financial sense.

Contact us in the sidebar to learn more about the programs that will best help your family.