About Government Refinance and Home Purchase Programs

Escalating armed conflicts Israel and Ukraine has been spooking global investors over the last few weeks. When investors get spooked they generally start moving funds into safe investments like U.S. treasuries. That compresses the yields on treasuries which in turn lowers mortgage interest rates. While we haven’t yet seen a big drop in mortgage interest rates, we are seeing the rates staying at 12 month lows and the recent headlines have been creating even more downward pressure on rates.

The upshot is that now is a terrific time to look into buying a home or refinancing to a lower rate. If you are looking into a refinance, contact us in the sidebar. For home purchase inquiries, contact us on our home purchase page.

Just over a year ago, in May of 2013, mortgage interest rates made a sudden upward jump on news that the Fed was planning on tapering its stimulus program. Since then mortgage interest rates have drifted back downward again. Rates on 15 and 30 year fixed mortgage are lower now than they were last summer and that is making refinances and home purchases extremely attractive again.

If you would like to lower the interest rate and payments on your current mortgage, contact us in the form in sidebar. Or if you are looking into buying a home, contact us on our home purchase page

In a turn of events that has surprised Wall Street, U.S. treasury bonds have become surprisingly popular with investors again recently. As investors pour money into treasury bonds, the yields on the bonds are dropping, and as usual, mortgage interest rates have been dropping right in step with the yields on the 10-year treasury note. As a result of these global financial trends, mortgage interest rates in the U.S. have dropped to lows not seen in the last 12 months. While rates are not back to the lows we saw in late 2012 and early 2013, they have been slowly inching that direction for more than a month.

With mortgage rates at 12 month lows, now is an excellent time to contact us in the contact form in the sidebar about refinancing programs, or contact us about home purchase programs in on this page.

The downward trend in mortgage interest rates that started a few weeks ago has continued unabated. Mortgage interest rates are now at new lows for 2014 and the downturn in the stock market stock market this week has helped that trend. A string of disappointing reports on the state of the U.S. economy has sent stock buyers running into bonds and that retreat by investors has lowered the yields on bonds which in turn is lowering mortgage rates. Mortgage rates are not approaching the all time lows on rates we saw in 2012 yet but this downturn in the market has created some of the lowest rates we have seen in the last 12 months.

If you have considered refinancing your mortgage, contact us right away in the form in the sidebar. Or if you are looking into buying a home contact us in the form on our home purchase page. There is no telling how long this current dip in rates will last so moving quickly is a good idea.

On the heels of the recent surprisingly bad U.S. GDP report, mortgage interest rates have been dropping in the last week. That GDP news has driven investors away from stocks and toward bonds which in turn has been compressing the yield on bonds. As of Friday the yield on the 10 year Treasury Note was just a tenth of a percent above its 2014 low. As a result, mortgage interest rates are testing new 2014 lows this week as well.

If you have considered investigating a government backed mortgage, now is a great time to get the ball rolling. Fill in the contact form on your right for guidance on refinances. For help with government backed home purchase programs fill in the contact form on our home purchase page.

Are you interested in seeing the trend in government-back mortgage interest rates? The easiest way is to track the yields on the 10 year Treasury Note, also called the 10 year T-Note. While this is only a rule of thumb way to track rates, it is one of those rules of thumb that is generally reliable and useful.

What we are seeing lately is that the par rate, or rate that requires no buy down, on 30 year fixed conventional (Fannie/Freddie) mortgages have been coming in at roughly 2% higher than the yield on the 10 year T-Note. For instance, the yield on the 10 year T-Note closed at 2.59% yesterday. The par rate on 30 year fixed conventional mortgages was roughly 2% higher than that, coming in around the mid 4’s. With FHA and VA loans the par rate has lately been coming in about 1.6% higher than the T-Note yield. So as of yesterday the par rate on 30 year fixed FHA and VA loans was in the very low 4’s.

Keep in mind that there are other factors involved in mortgage rate trends so this rule of thumb is just that; a quick, rough way of estimating trends. Also, this is just the current trend on 30 year fixed loans — rates for government-backed 15 year mortgages or the various ARM mortgages available tend to be significantly lower than 30 year fixed rates.

The good news is that mortgage interest rates remain very low by historical measures. That is excellent for anyone looking to buy a home. It is also good news for anyone looking to refinance to a better mortgage. Contact us today for more guidance on available programs and rates.

Predictions of mortgage interest rates shooting up have been floating around for many months. In May of 2013 when mortgage rates moved higher on whispers that the Fed was going to take its foot off the pedal with regard to its Quantitative Easing program, some pundits speculated that mortgage interest rates would move steadily higher for years to come. But a funny thing happened — rates leveled out last summer and haven’t made an major, lasting moves since then. Rates on most 30 year fixed Fannie/Freddie conventional loans have remained in the mid to high 4’s and rates on 30 year fixed FHA and VA loans have stayed in the mid to low 4’s.

There is no telling what will happen to rates going forward, and it is still a safe bet that in the long run rates will move higher, but for now mortgage interest rates remain quite low by historical measures. With Ben Bernanke out as the Fed Chair and Janet Yellen running the show at the Fed now, it remains to be seen what the Fed will do to continue to stimulate the sluggish US economy.

While the future of mortgage interest rates is unknown, what is known is that rates are historically low right now. If you have considered purchasing a home or refinancing your current mortgage, now is an excellent to contact us to learn more about the various government-backed mortgage programs that are still available.

Just fill in the contact form in the sidebar for refinance information or for home purchase programs fill in the form on this page.

Russia’s recent aggression toward its neighbor, Ukraine, sent financial markets reeling in recent weeks. That market instability has affected mortgage interest rates as well. Rates initially dipped as fears of a war sent investors rushing to bonds rather than stocks. But as the situation settled down the stock market surged again and they temporary dip in interest rates passed.

Long term, it is safe to assume that mortgage interest rates will move higher in 2014 and 2015. But for now rates remain relatively low. Contact us today if you are researching a refinance or a home purchase. There is no telling how long mortgage rates will remain at current levels before moving higher.

Can you buy a home with no money down in 2014? The simple answer is, yes. However there are caveats.

See our Home Purchase page here for an overview of the various government home purchase programs. The two main ways to buy a home with no money down in 2014 are:

1) Utilize the VA mortgage program
2) Go with the USDA rural housing program

In order to get a VA loan you have to be a military veteran with VA eligibility. The rural housing program is available to anyone, but you have to be willing to by a home that somewhat removed from the city. (See here for the USDA’s map of eligible areas).

Most everyone else will need to have a down payment of at leat 3.5% of the purchase price to qualify for an FHA loan and 5% for a conventional loan. The FHA allows that 3.5% to be a gift from family or friends but with conventional loan the 5% needs to be your own savings.

So while there are some good no money down programs available, those programs aren’t for everyone. In many cases at least a small down payment will still be necessary.

If you are interested in buying a home contact us in the form on this page today to learn more or to get help pre-qualifying.

There was an interesting segment that aired on Yahoo Finance recently. The basic point was that there are many Americans who have never refinanced at all and as a result are paying too much in interest on their mortgages. If you know someone who has never refinanced or who has an interest rate that is too high have them contact us right away to see if they are wasting money on a mortgage that it too expensive.

Here is that clip:

After a long march upward, the US stock market has been taking a beating in the last week or so. The Dow Jones Industrial Average is down nearly 800 points for its high point at the end of December. The other indexes are seeing similar sell offs over the last ten days.

While the stock sell-off is not great news for the portfolios of investors, it has been good news for mortgage interest rates. As investors pull money out of stocks they tend to invest money in other places like mortgage backed securities and bonds. That inflow of money leads to lower mortgage interest rates. And as expected, mortgage interest rates have been drifting lower in the last week.

Odds are that mortgage interest rates will move significantly higher over the course of 2014, but there will be dips along the way. We are entering one of those dips right now so if you have considered looking in to refinancing your mortgage or buying a home, contact us right away. There is no telling how long this dip in rates will last or if we will see a dip in rates like this again.

As we enter 2014 we also enter a new phase of mortgage regulations. Several new rules designed to prevent another housing bubble from emerging are set to take effect this week. For borrowers, the new rules will mostly mean that it will be a little harder to qualify for large loan amounts. The most substantial change for borrowers is a tightening of debt-to-income ratio limits on conventional (Fannie and Freddie) mortgages. There is now a fixed 43% debt-to-income ratio cap on conventional mortgages that cannot be exceeded. That means all of a borrowers monthly debt payments, including the mortgage, should not exceed 43% of gross monthly income. For middle class families this could have an impact on the amount they can borrow to purchase a home or to refinance.

Of course there is wisdom in keeping DTI ratios low, but in some cases it helps to have more wiggle room with DTI. The good news is there are alternatives to conventional mortgages though. The new debt-to-income ratios don’t apply to FHA or VA loans for instance. Plus there are other alternatives that can be investigated on a case by case basis.

Contact us today to learn more and see which government refinance or home purchase programs best fit your situation.