About Government Refinance and Home Purchase Programs

The Home Affordable Refinance Program, or HARP program, was initially set to expire at the end of 2013. But today the government agency that oversees HARP announced the highly successful program will be extended for two more years until Dec. 31, 2015.

Ed DeMarco, the director of the Federal Housing Finance Agency (FHFA) said this about the extension of the HARP program:

“More than 2 million homeowners have refinanced through HARP, proving it a useful tool for reducing risk. We are extending the program so more underwater borrowers can benefit from the lower interest rates.”

The HARP program applies to conventional mortgages that are currently backed by Fannie Mae or Freddie Mac. There has been speculation that a “HARP 3” program might be launched at some point in order to expand that pool of candidates for the HARP program beyond the current parameters but nothing has been announced on HARP 3 yet.

This two year expansion means there is more time for a HARP 3.0 and other enhancements of the program to get off the ground though, so bookmark this site to get the latest news on the HARP and other government refinance options. Contact us in the sidebar today to learn more about all of the government refinance programs that are currently available.

Mortgage interest rates have been moving lower for over a week now. A slow but steady drumbeat of disconcerting world news, including signs of more financial troubles in Europe and increasingly aggressive actions from North Korea have sent investors all over the world back to safer investments like US Treasuries. The increased popularity of US treasuries has in a roundabout way put downward pressure on mortgage interest rates again. While rates are not yet at the all time lows we saw in last winter, they are better than the increased rates we saw for much of February and March.

One big mistake that a lot of people make when looking to refinance is waiting too long to get the process started. Many borrowers wait until they think rates have bottomed out before starting a refinance process. The problem with that is that it often takes a few weeks of working on a refinance before it makes sense for a lender to lock the rate in so many borrowers miss the lows by starting too late. The best time to start a refinance is while a downward trend in rates is starting because borrowers are less likely to miss the lows in rates. Contact us in the form on the right today to learn more about the government mortgage programs that the Obama administration has in place.

One type of government backed mortgage we haven’t talked about much here in the past is the USDA rural housing loan. These USDA loans have some terrific advantages for folks who qualify. USDA mortgages have excellent rates and are one of the very few types of loans left that allow for zero money down on purchases. The main issue with the USDA mortgages is that one has to be purchasing a home in a rural, or at least relatively rural area to qualify. However, the definition of “rural” is pretty loose and in lots of new suburban communities that used to be rural areas these USDA loans are applicable still. The other sticking point for some folks is that this USDA program has a maximum income restriction so in many cases families that make six figures per year may not qualify for a USDA rural housing loan.

Our focus here has historically been mostly on refinances so if you have a USDA rural housing loan now contact us in the sidebar for info on refinancing it to a better rate. But if you or someone you know is considering purchasing a home, contact us in the sidebar as well and leave a note in the comments section that you are interested in purchasing a home rather than refinancing. We can get you information on the USDA rural housing program and other programs available in your area.

The Home Affordable Refinance Programs, or HARP, was launched in 2009. The program got off the ground fairly slowly but has been picking up steam ever since. The Federal Housing Finance Agency (FHFA) recently announced that in 2012, 1.1 million HARP refinances were completed. That is as many HARP loans as were completed between 2009 and 2011 combined.

Several factors have contributed to the upswing in HARP refinances: 1) Lenders finally became comfortable with the program and started approving more HARP loans, 2) Interest rates hovered near all time lows for much of 2012, and 3) The HARP 2.0 program went live in the summer of 2012 and that opened the program to many new candidates.

As we progress into 2013, all of the factors that made 2012 a banner year for the HARP program are still in place. Rates are still near all time lows, it is easier now to qualify for a HARP loan than ever before, and the infrastructure to get HARP loans completed is better than ever. Contact us in the sidebar to learn if the HARP program (or one the the other government refinance programs) can help your family.

Mortgage interest rates in the US have been moving lower the last few days thanks to troubles in a tiny Mediterranean island country.

As we have noted, the recent rally in the US stock markets caused mortgage interest rates to rise for the last month or so. That stock market rally was slowed this week on news that the tiny European country of Cyprus was in financial dire straits. The startling news was that Cyprus was planning to basically take a cut out of all the money deposited in its banks. It’s hard for us Americans to imagine the government coming in and taking a percentage of the money we have in stored in our bank accounts but that is pretty much what Cyprus was proposing. The very idea of such a move spooked investors all over the world on fears that starting down that slippery slope could eventually lead to a panic and a run on banks in Europe. So far Cyprus has not enacted that plan but the entire episode has cooled the rally in stocks and has sent many investors back into safer US treasury bonds. More people buying bonds drives yields on the 10 year T-bill lower and mortgage rate have followed. As a result, this weeks rates have been better then they were the previous few weeks.

If you have been considering refinancing to a better interest rate now is the time to investigate the various government refinance programs available. Rates are near all time lows for now but can’t stay this low forever. Contact us today by filling in the contact form to the right.

The FHA has been slowly going broke ever since the housing bubble burst in 2007. After sub-prime lending went extinct in 2007 the alternative for many borrowers and lenders was FHA loans. FHA loans became popular because they require little money down for purchases, they usually have low interest rates, and they allow for lower credit scores than conventional loans. The problem for the FHA was that housing prices continued to drop for several years after the FHA boom in 2007. Many of the loans the FHA had insured ended up defaulting and the FHA has been on the hook to pay the lenders off. That has led to a depletion of the FHA insurance funds.

To raise more money, the FHA has raised their mortgage insurance fees numerous times in the last few years. The next scheduled change will make the monthly FHA mortgage insurance fees last for the life of the loan rather than for the minimum 5 years that is in place now. This change in policy means that anyone looking to refinance their current FHA loan to the current all time low rates should get the process started in May to avoid the upcoming mortgage insurance change.

Borrowers with FHA loans should contact us today to get an estimate on an FHA streamline. Rates on 30 year fixed FHA streamlines have been in the mid to low 3’s in recent weeks. And while FHA streamlines will still exist after the coming change on June 3rd, the FHA rules are less expensive right now than they will be next month.

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.

Prior to the recent state of the union address there was speculation that President Obama might bypass Congress and enact new mortgage relief guidelines through an executive order. The rumored changes, being tentatively called “HARP 3”, were reportedly going to open the benefits of the current HARP programs to borrowers who currently do not qualify for it. But in the speech President Obama gave he made it clear that, initially at least, he would wait to see if Congress could draft and pass legislation to accomplish that goal.

In the current gridlocked environment in Washington it seems unlikely that the House and Senate will be able to agree on any such legislation. It is unclear how long President Obama will wait on this legislation before taking matters into his own hands. Or it is possible that the Obama administration is just bluffing and has no intention of bypassing Congress with a HARP 3.0 program. Only time will tell. But for now we are in a wait and see period when it come to the potential HARP 3.0 program.

In the meantime, there are are several excellent government refinance programs already in full swing. Fill in the contact form on the right to get more info and 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.

While mortgage interest rates are not breaking new records this week they continue to stay down near record lows.

For FHA streamlines (FHA to FHA refinances) the interest rates have been in the mid to low threes in recent weeks. This can vary based on the age of the current FHA loan though. FHA loans that were started in the spring of 2009 or sooner have a special program that allow for lower costs. Consequently, lower interest rates are common with those loans because less lender credits are needed. For newer FHA loans (FHA loans started summer of ’09 or later) the streamline rates have been in the mid threes as well. In both cases it is common for borrowers’ break even on costs to be immediate so contact us in the sidebar today if you have an FHA loan.

On HARP loans, rates tend to be a bit higher. For significantly underwater homeowners with Fannie-Mae-backed conventional loans, most HARP refinances have been coming in between 3.875% and 4.25% in the last month or so. Part of the reason for this is that Fannie and Freddie recently raised their fees in order to remain solvent as companies. For borrowers with Fannie Mae loans who are not upside down on their first mortgage rates are better though. If you have a conventional loan see here to find out if Fannie or Freddie have backed your loan. If you do have a loan backed by Fannie or Freddie, contact us to get more info on the HARP program.

For folks with VA mortgages or with conventional loans that are not backed by Fannie Mae or Freddie Mac, rates are very low as well. VA rates tend to be very close to FHA rates and the VA-to-VA streamline program is even easier than the FHA streamline program. Rates on conventional loans where there is enough equity in the home tend to be better than HARP loan rates. Contact us in the form on the right to learn more about those programs as well.