About Government Refinance and Home Purchase Programs

The Dow has surged to all time highs in the last few weeks on the heels of better than expected news on US jobs as well as encouraging signs from Europe. While a surging stock market is great for investors, it normally leads to higher mortgage interest rates. In this case the pattern only partially held. The Fed continues to go to great lengths to compress mortgage interest rates and those efforts are largely keeping rates from quickly rising. Rates are still holding near all time lows for now, but the efforts of the Fed won’t hold rates down forever.

If you have looked into a refinance in the past, or if your are considering researching a refinance now, we recommend you contact us right away while rates are still near all time lows and while several government-backed refinance programs are still in full swing. While an improved economy is desirable overall, it will also mean a return to the higher interest rates we have traditionally seen over the last four decades. Borrowers who refinance now will enjoy the benefits of record low interest rates even after the economy finally gets fully healthy. Contact us in the form on the right to get more info.

After hitting all time lows last November, mortgage interest rates have been slowly inching higher for about three months since then. That trend higher reversed last week as volatility in the stock market sent investors back into government bonds which in turn pushed mortgage interest rates lower. As we have discussed in the past, the yield on the 10 year T-Note tends to mirror mortgage interest rates. So in general, when government bonds gets more popular with investors, mortgage rates dip.

Of course markets are famously unpredictable so there is no telling if this latest dip in rates will last. So contact us in the sidebar now to get more information on the government-backed programs that are available and perhaps get an estimate.

We might be closer to “HARP 3.0” than expected. The Obama administration is reportedly considering issuing an executive order that would open the benefits of the HARP program to responsible borrowers who have conventional mortgages that are not currently backed by Fannie Mae or Freddie Mac. If this happens it would open the door for hundreds of thousands of homeowners to refinance to the historically low interest rates we are now seeing. Currently, borrowers who have less than 20% equity in their homes have great difficulty refinancing unless they have an FHA loan, Va loan, or a conventional loan backed by Fannie or Freddie. In cases where they still have some equity this currently undeserved group must add mortgage insurance to the loan and in cases where they have no equity they are out of luck entirely. So an executive order opening the benefits of the HARP program would be huge news.

Contact us in the sidebar to get the more information.

Good news for the stock market is bad news for mortgage interest rates. At least that has been the general rule over the last several weeks. As more investors move money into the surging stock market they are taking money out of bonds, and money leaving bonds tends to lead to higher mortgage interest rates. The trend in mortgage interest rates over the last 8 weeks has been upward, albeit slowly, as the DOW has surged to 5 year highs. But over the last few days the DOW has given back some of its gains and thus bonds and mortgage interest rates are slightly improving again in response.

If you have been considering taking advantage of the near-record-low mortgage interest rates we have been experiencing lately, or if you have considered taking advantage of the government-sponsored mortgage refinance programs that are now available, this is a good week to get started. With any luck the trend upward is over for a little while and mortgage rates will trend back down for the next several weeks. Contact us in the form on the right to learn more about available programs and to get an estimate.

Today the FHA announced planned changes that will increase the costs of FHA loans going forward. First, the monthly mortgage insurance premium on new FHA loans will increase once again. The plan is to raise the annual MIP by 0.10%. Second, as we previously reported, the FHA will begin requiring their monthly mortgage insurance premium to continue for the life of the loan. Currently FHA monthly MIP payments can be dropped after five years when more than 22% equity is reached in the home. When these changes are implemented that will no longer be the case for all new FHA loans.

The FHA will give official guidance on the timing of these changes in the next few days. But we know already that anyone with an FHA loan should contact us immediately to look into an FHA streamline to a lower interest rate while rates are still near all time lows and before these new costs are implemented.

The fiscal-cliff-aversion bill that passed congress late last night had some good news for folks with government-backed mortgages. One of the stipulations of the bill was a two year extension of a 2011 provision that allowed mortgage insurance (mip or pmi) to be tax deductible. The provision mostly applies to borrowers who claim less than $100,000 in income. Borrowers at that income level or lower can deduct 100% of the mortgage insurance they pay upfront in a refinance or that they are paying on a monthly basis. This tax deduction will last through the end of 2013 at least. Borrowers who claim more than $100,000 in taxable income may also deduct some, but not all of the mortgage insurance paid.

This news is especially good for folks who have FHA loans now. If you have an FHA loan, contact us in the sidebar to learn more about the FHA streamline program right away. Or if you have any loan with mortgage insurance, 2013 is a great year to refinance. Not only are rates still near all time lows, but any money that goes toward mortgage insurance is tax deductible for now.

Reports out this week have interest rates on government-backed mortgages still hovering near their all time lows. But with the Democrats and Republicans in Washington unable to agree on anything there is a lot of skittishness on Wall Street and in the mortgage investment markets about the pending “fiscal cliff” that remains unresolved. If Washington fails to come to an agreement that amends or at least delays the fiscal cliff it could be bad news for the fledgling economic recovery in the US. Rates won’t stay this low forever and one takeaway from this uncertainty in Washington is this: The sooner American borrowers get started on the refinance process, the lower their risk will be of missing this all time trough in mortgage interest rates.

Contact us in the sidebar to learn more about the available programs and how to get a quote before the end of the year.

The morning after the general election yielded a pleasant surprise for folks looking into refinancing their mortgage. Purchases of mortgage-backed securities skyrocketed. That means interest rates on government mortgage programs have dipped in response. Mortgage interest rates broke new record lows earlier this fall when The Fed announced a long term program to buy mortgage backed securities to help keep mortgage interest rates low. With President Obama winning the election two things happened to help investor confidence: 1) The uncertainty about who the president would be was removed and 2) The threat of Ben Bernanke being fired by Mr. Romney went away. No doubt those uncertainties being settled has bolstered investor confidence in the short run.

What that means for now is mortgage interest rates could be testing new lows over the next several weeks. If you have been considering investigating a refinance (even if you have already refinanced your mortgage in the past) now is a very good time to contact us in the form on the right to get more info and an estimate on the government-backed refinance programs that are available.

A lot of people have been wondering how much of an effect the results of the pending US general election will have on government-backed mortgage interest rates. The short answer is: Probably not much.

Mortgage interest rates tend to be driven by several different market forces and the election is not projected to impact those forces directly in the short run. The near-record-low mortgage interest rates we have been seeing lately are the result of, among other things, aggressive purchasing of mortgage-backed securities by the Fed and by the ongoing popularity of US treasury bonds as a safe haven for money. Those things are not likely to change quickly regardless of who is elected in November so don’t expect any jolts one way another.

Of course over time it will matter who wins the presidential election and other congressional races but there is no way of telling now what will happen with rates regardless of if Romney or Obama is the next President of the United States. One thing that is certain is that mortgage interest rates will not stay at or near record lows forever. Sooner or later rates will rise again to more traditional levels. So we recommend you contact us today to learn more about the available government refinance help programs while rates are still at historic lows. Getting the process started in early November ought to allow most borrowers to close their new loans before the end of the year. To learn more fill in the form on the right.

The effects of the Fed’s “QE3” are in full swing now in the mortgage markets. Mortgage interest rates broke all time lows last week and are remaining low this week. That means that in most cases 30 year fixed rates are in the 3’s and 15 year rates are in the 2’s right now.

Some homeowners who have already refinanced are wondering if doing so again will make sense. That question must be answered on a case by case basis, but there are some general factors to look at:

1. How long do you plan to own the home? If you plan to live in the home for decades more, 30 or 15 year fixed mortgages are the way to go. But if you are confident you will sell the home in the next 5-10 years it makes sense to look at a 5-10 year adjustable rate mortgage (ARM). Rates on government-backed ARM’s are in the 2’s right now and rates that low can significantly reduce payments for the next 5-10 years before you sell the home.

2. How much lower can your rate get with a refinance? If your rate is already in the 3’s on a 30 year fixed mortgage it might be hard to justify a refinance again. But if you are in the 4’s or higher it will be worth getting an estimate. On larger loans even lowering the rate by a quarter or half percentage point can make a big difference.

3. How long will it take to break even on the refinance? Sometimes you can get a truly no-cost refinance where the authorized lender pays for all of the costs and rolls nothing into the loan. This is most common with FHA to FHA or VA to VA streamline refinances. In such cases the break even is immediate so refinancing in such cases is often a no-brainer. If you have and FHA or VA loan now contact us in the sidebar right away. There are normally closing costs rolled into the loan on conventional and HARP refinances but if you can get a significantly lower rate in break even on all closing costs in 1-2 years such a refinance can make a lot of sense too — especially if you plan to own the home for several years to come.

To get more info fill in the contact form on the right. There has never been a better time to refinance to a government-backed mortgage. This is true for borrowers who have equity or those who are upside down / underwater alike.

Mitt Romney made news today by proposing eliminating some tax deductions that could include the mortgage interest deduction. His opponents will jump all over his comments and claim that Romney is trying to take away the mortgage deduction. But that is not really what he said. Here is what he said in a local TV interview in Colorado:

As an option you could say everybody’s going to get up to a $17,000 deduction. And you could use your charitable deduction, your home mortgage deduction, or others — your health care deduction, and you can fill that bucket, if you will, that $17,000 bucket that way. And higher income people might have a lower number.

So basically Romney wants to give a 20% tax cut across the board but is considering offsetting that cut with a limit to the amount that can be deducted in total from things like charity, mortgage interest, etc. Of course at this point Romney is just floating a tentative idea. But if he manages to win the election in November ideas like this would have a deep impact on the mortgage market if actually implemented.

It is not yet clear what government-backed refinance programs a Romney administration would continue to support. With any luck more details will arise though so we’ll continue to report on mortgage-related news from the campaign trail through the election.

In the meantime, contact us in the form on the right to learn about the existing government-backed mortgage refinance programs and how they can help your mortgage situation.

In his weekly radio address this week President Obama pointed a finger at the US Congress for ignoring a $5-10 billion plan he proposed last February designed to help more American homeowners who are underwater or upside down on their mortgages. Here is what the president said:

Back in February, I sent Congress a plan to give every responsible homeowner the chance to save about $3,000 a year on their mortgages by refinancing at lower rates. It’s a plan that has the support of independent, nonpartisan economists and leaders across the housing industry. But Republicans in Congress worked to keep it from even getting to a vote. And here we are — seven months later — still waiting on Congress to act. This makes no sense. Last week, mortgage rates were at historic lows. But instead of helping more and more hardworking families take advantage of those rates, Congress was away on break. Instead of worrying about you, they’d already gone home to worry about their campaigns.

The move by the president was largely symbolic and political in nature because there is no chance the congress will look at any such ideas prior to the November elections. Last February the congress rejected the idea because of the large price tag it came with. There is no indication right now that the stance of the GOP led congress would change even if President Obama were re-elected. But of course circumstances in Washington can change quickly as well.