About Government Refinance and Home Purchase Programs

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.

The highly anticipated Fed announcement today ended up being good news for borrowers considering refinancing their mortgage or buying a home. The gist of the announcement was that the Fed was going to put a lot more money into compressing interest rates heading into this fall. Here is a quote from the statement:

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

This is the “QE3” that many pundits suspected was coming and it is more aggressive than many assumed. For consumers, mostly this means that mortgage rates could continue to test new all time lows for the next couple of months.

Contact us in the sidebar to learn more about the various government-backed mortgage refinance programs available and to get an estimate.

A disappointing jobs report was released this morning. Expectations were than the US economy would add about 140,000 jobs in August but the number came in at 96.000. The immediate market reaction to that unpleasant news was a increase in buying of mortgage backed securities and treasury bonds as investors sought safe havens for their money. Upticks in purchases of treasury bonds and mortgage backed securities inevitably lead to mortgage interest rates dropping.

So while indications that the US economy is still faltering is not good news at all, it has at least had the positive effect of keeping downward pressure on mortgage interest rates for now. Of course there is no telling how long this current trend will last so if you are interested in seeing if a government-backed refinance programs can help your family contact us in the form in the sidebar today. With any luck we can help direct you to a program that will make a positive difference for your household.

After hitting all time lows in July, interest rates on government-backed mortgages began moving up again for most of August. But we have seen a reversal in that upward trend in the last week or so. Mortgage interest rates have improved again for several straight days. Whether mortgage interest rates continue to test all time lows heading in to the fall is in large part dependent on the Fed announcements coming out later this week. Most pundits believe that if the Fed announces it will launch another round of quantitative easing, or “QE3”, that will be worse for mortgage interest rates than it will be if the Fed remains non-committal on the subject. We will be closely monitoring the situation and reporting new developments here.

Contact us in the sidebar to learn more about the government-backed refinance programs that are available.

After breaking records for all time lows in July, mortgage interest rates have slowly begun inching higher again in August. This is in response to some macro-economic news that led to the yields on the 10-year treasury note to increase over the last few weeks. Of course mortgage interest rates increasing again after breaking new record lows was inevitable, but the good news is that so far the rates are still near those all time lows.

There is no telling where rates will be in a few months, but odds are that in a couple of years 30 year fixed mortgage rates will be back in the more normal 5-7% range rather than in the high 3s and low 4s like they are now in many cases.

Not everyone can qualify for a government-backed refinance but the folks who can and do refinance to these low rates will be in an enviable situation for years to come. Contact us in the form on the right to get more information about the government-backed refinance programs available.

The record low mortgage interest rates we have seen in the last couple of months are persisting this summer. Ongoing troubles with the European and US economies are serving to keep yields on US treasuries low and mortgage interest rates are following suit. While there has been some recent pullback among many lenders from government-backed refinance programs like the FHA streamline program and HARP 2.0, those programs are still available to borrowers, even if it is taking a bit longer than usual to complete the refinancing.

At this point rates are so astonishingly low that most American mortgage holders should be at least investigating a refinance. In many cases borrowers can get 30 year fixed mortgages in the 3’s and still break even on closing costs in less than a year. And rates on 15 year fixed mortgages are getting as low as the low 3’s or even high 2’s in some cases. Refinancing to a significantly lower interest rate can save borrowers hundreds of dollars per month and many tens of thousands of dollars over the life of the loan in most cases.

Contact us using the form to the right to learn more about the programs available and to get an estimate on a government-backed mortgage refinance.

We sometimes get asked if there are really no cost refinances out there or if that is simply marketing spin by banks. The short answer is yes, no cost refinances do exist, but they are more rare than many lenders imply with their advertising.

As the old saying goes, there is no such thing as a free lunch. In this case there is technically no such thing as a truly “no cost” refinance because either the lender has to pay for the costs of a refinance or you do. However there are cases when lenders are willing to pay for all of your closing costs on refinances so it can be no cost to you. Lenders are able to do this because on most loans they are being paid a commission or finders fee for the mortgage by their investors. So for example, if an investor is willing to pay a lender $3000 for servicing rights to your new government-backed mortgage the lender can pay $2000 of your closing costs and still not lose money on the transaction.

Most likely no-cost mortgages

– FHA streamlines for FHA loans that were closed more than three years ago. If you have an FHA loan that you got in the spring of 2009 or earlier you could qualify a real no-cost FHA streamline refinance. For people in this situation the FHA has waived virtually all of the upfront mortgage insurance fees and does not allow any other closing costs to be rolled into the new loan. This results in a refinance that really does significantly reduce interest payments and payments without costing borrowers anything. Contact us to learn more about this program if you currently have an FHA loan.

– Most other types of refinances with slightly higher interest rates. For other types of refinances the most likely way to get a no cost refinance is to get a rate that is a quarter point or more higher than than average. For instance if the average mortgage rate is 3.75% you can normally get most or all of your closing costs paid for by the lender by going with a 4.0% rate. The higher interest rate gives lenders more money to pay for costs, including both the up front out of pocket expense and the costs rolled into the loan. It doesn’t always make sense to go for higher interest rates and lower closing costs though because the longer you own the property the more valuable the lower interest rate becomes.

Out of pocket costs vs. costs rolled into the loan.

Sometimes lenders will tell you that if you bring no cash to closing that it is a “no cost” refinance. But if closing costs are rolled into your new mortgage there are still costs to you. If $5000 in closing costs get rolled into your new mortgage that means you are $5000 deeper in debt and you still have to pay that money back eventually. It is important to calculate the actual costs and the number of months it takes to break even on those costs before proceeding with a refinance. (*Contact us to be connected with authorized lenders who always help borrowers calculate break even costs.*) Normally if you plan to own the house 5+ years you should be alright with a break even point of less than 2 years on a refinance but the faster you can break even the better.

Fill in the contact form on the right to get more information on this topic or to find out which government-backed refinance programs you can qualify for. With rates at all time lows this month there may never be a better time to refinance your mortgage.

As predicted, the new FHA streamline program that launched in June created a massive stampede of FHA streamline refinances over the last month or so. But as we approach August the flood of refinance applications is slowly subsiding while interest rates on government-backed mortgages continue to drop to new all-time lows.

If you have an FHA loan contact us today to see about streamlining your mortgage to a new FHA loan in the mid to high 3’s. Likewise, if you have a conventional or VA loan fill in the contact form on the right to get a quote for a new refinances at surprisingly low interest rates. With rates at all-time lows again it is starting to make sense for more and more people to take another look at refinancing. And with the backlogs in underwriting starting to ease finally the wait times on many government-backed loans won’t be as long in the latter half of the summer as they have been in the first half.

A few weeks ago we reported that the latest flare up in the European debt crisis was causing mortgage interest rates (on both government-backed loans and conventional loans) to approach record lows. Since then the anxiety over Europe’s economy has deepened and the recent jobs report in the US was much worse than expected. Those developments have sent many global investors fleeing back to the safe haven of US treasuries. And that in turn has led to new record lows on mortgage rates in the last few days.

We are getting reports from several authorized lenders that borrowers with good credit have been getting FHA streamline loans at around 3.75% in the last week or so. Likewise borrowers with plenty of equity and good credit are getting conventional refinance loans through Fannie Mae and Freddie Mac in the high 3’s. Borrowers who are significantly underwater on their Fannie/Freddie loan and thus are participating in the HARP 2.0 program are still getting rates in the mid 4’s but that is still often saving hundreds of dollars per month.

Contact us in the sidebar right away for guidance on the best program for your situation. These record low interest rates are a temporary thing so the sooner you can get started and lock a rate in the better.

With the debt crisis in Europe flaring up again, more and more investors are fleeing stocks for the safety of US treasury bonds. The more investors buy up US treasury bonds, the more mortgage interest rates tend to dip. The latest round of European debt fears has driven mortgage interest rates down to levels that are once again threatening all time lows.

As we have noted before, rates on HARP 2.0 loans tend to be somewhat higher than rates on less risky mortgages. But even at rates slightly higher than other mortgage HARP 2 loans are often great options for those who can qualify. And rates on all types of mortgages have been improving with the yield on the 10 year treasury note dipping again.

Rates on FHA loans are especially low lately — often lower than the best available rates on conventional mortgages. This is especially good news to folks who have FHA loans that are more than three years old because they should be eligible for the new FHA streamline program set to launch in June 2012. Borrowers with VA and conventional mortgages now also have plenty of reason to investigate refinancing right now.

Contact us in the sidebar today to learn more about the available programs and rates while we are still in this historic dip in rates.

After sinking to all time lows in February of this year mortgage interest rates slowly moved higher throughout the month of March. But a recent batch of bad economic news sent the stock market tumbling has helped mortgage interest rates to move lower again as well. As we have noted here in the past, mortgage interest rates tend to track the yields on the 10-year treasury note and when investors are fleeing stocks they often purchase more 10-yr T-Notes which in turn lowers the yield on those bonds. The current dip in mortgage interest rates is most likely associated with the less than stellar jobs report that came out last week as well as renewed debt crisis worries in Europe. Rates may not hit new record lows again but they are getting nearer to those record lows again this month.

Contact us in the sidebar right away to learn about the government-backed refinance programs that could help your family.

Despite some daily ups and downs, interest rates on most government backed mortgages remain at or near rates that have not been seen in the US in the last 50 years. Rates on FHA and VA loans have been slightly lower than the rates on conventional Fannie/Freddie loans but all are shockingly low as of late. If you have a 30-year fixed interest rate at 5% or higher or if you have an adjustable rate mortgage (ARM) contact us in the sidebar to learn more about the programs and rates that are available this week.