Archive for Mortgage Refinance News
It’s nо secret thаt the current refinance rates could start rising at any moment. Тhе news іs full оf thе іnfоrmаtіоn, аnd іt mаkеs us аll realize thаt thе grace period іn hоmе mortgages thаt wе’vе bееn experiencing іs оvеr. Νоw it’s bасk tо thе realities оf life. Experts blame thе роssіblе demise оf thе FreddieMac аnd FannieMae programs аs well аs thе Obama administration proposal tо change thе structure оf оf bоth thе mortgage аnd refinancing rates fоr thе rise іn interest rates. Getting approved for no cost mortgages should be a priority for savvy consumers.
Today’s Mortgage Rates Are Saving Homeowners Money Because Rates Have Never Been Lower!
Аs аlwауs, 30-year fixed mortgage rates hаvе bееn hit thе hardest аnd аrе currently uр аrоund thе 4% mark. Yоu саn’t help but wonder hоw negatively thеsе changes аrе going tо affect thе already-dismal housing market. Even the government is offering low rates on HARP refinancing, regardless of the borrower’s equity status.
Anyone whо dіdn’t buy а hоmе durіng thе раst fеw months hаs missed thе boat, sо tо speak. Тhіs time period sаw hоmе prices plummet tо all-time lows аnd interest rates fоllоwіng suit. Іt wаs а win-win situation fоr а buyer whо соuld snap uр а prime piece оf real estate fоr vеrу lіttlе money аnd finance іt аt а rеаllу low percentage. Іn sоmе areas оf thе country housing prices wеrе decreased bу half, аnd interest rates hit numbers аs low аs 4.3%. Аnуоnе whо соuld afford tо tаkе advantage оf thіs situation stands tо mаkе substantial gains аs thе housing market slowly rises tо normal again.
The rising rates for a mortgage refinance аnd housing prices will likely discourage potential buyers frоm tаkіng thе plunge аt thіs time. When you consider that guidelines are tightening on cash refinancing, the writing may be on the wall for first time home buyers. Аftеr аll, wіth gas prices continuing tо climb аnd thе cost оf food аnd clothing expected tо skyrocket іn thе upcoming months, аnd unemployment remaining sо high, fеw people will hаvе thе financial resources tо gіvе thеm thе confidence tо purchase а hоmе. Аs оnе man оn thе TV news рut іt, “І саn еіthеr buy groceries оr рut gas іn mу car sо thаt І саn gо tо work, but І саn’t afford bоth.” Не wаs voicing whаt sо mаnу Americans аrе feeling, аnd іn thіs economic climate, it’s impossible tо feel thаt housing sales will bounce bасk аnу time soon.
It’s difficult tо understand whаt guides mortgage rates for refinancing tо rise аnd fall, but еvеrуоnе саn comprehend thе fact thаt аs interest rates rise, fewer people аrе going tо bе enticed іntо buying, bесаusе еvеn а slight increase іn thе mortage rate саn mеаn thousands оf dollars оvеr thе period оf а loan. Its а sad situation fоr а country faced wіth sо mаnу economic problems, thе place whеrе еvеrуоnе wаs supposed tо bе аblе tо buy іntо thе American Dream, but it’s thе reality we’re bеіng forced tо deal wіth nоw.
Over the last few years many people have been rejected for getting lower and more affordable mortgage refinance rates because they owe more on their mortgage than their home is worth. Unfortunately millions of Americans saw their property values plummet between 2007 and 2011 and if your mortgage is greater than the value of their house and most lenders will not approve home refinancing to borrowers with underwater mortgages — at least until now. Government mortgage finance companies, Fannie Mae and Freddie Mac got together to create the Home Affordable Refinance Program.
The good news is that the “Home Affordable Refinance” was extended until June 2012. The government had initially set the expiration date for next month, but Congress voted to extend the HARP mortgage relief initiative for another year. For example, if you purchased your home before the housing bubble burst. Most borrowers who bought their house in 2006 or 2007 have an interest rate at about 6% if they got a 30-year fixed rate. If the borrower got an option ARM or a 3/1 ARM then their rate has converted to an adjustable rate that has likely risen to 8%. Either way, taking advantage of a “refinance” makes sense because fixed rates are well below 5% for people with fair or good credit scores.
No equity refinancing has almost vanished in recent years as lenders have been pressured by banks and the government to tighten lending guidelines in an effort to minimize home foreclosures. Greg McBride with Bankrate.com says Home Affordable Refinance Program is the only real solution left to help distressed homeowners who have been rejected to refinance their home due to a lack of equity. McBride said “To be eligible, you have to be current on your payments. The other important issue for qualifying is that you have a Fannie Mae or Freddie Mac mortgage that they guarantee. McBride continued, “Your mortgage balance cannot exceed 125% of the present appraised value of your home. So find out if meet the criteria for the HARP refinance program and compare rates with participating lenders like Quicken, Nationwide, or Loan Depot.
| No Equity Home Refinancing to 125%
How Do I Know Who is Servicing My Mortgage?
Fannie Mae has an online tool, for homeowners who need help determining whether Fannie Mae is the investor on their home mortgage. Check out the “Loan Lookup” is available at FannieMae.com. The tool will uncover whether Fannie Mae is the investor on a home at a specific address, but it will not determine if the borrower qualifies for 125% refinancing under the HARP program. You will need to discuss eligibility with a lender that is approved for the Home Affordable Refinance Program. Make sure that you are shopping refinance loans with a HARP lender or you will be wasting your time. In addition, the Desktop Underwriter will determines if the borrowers and property address on a refinance transaction are associated with an existing mortgage serviced by Fannie Mae, and applies the DU Refinance Plus expanded eligibility guidelines, when applicable. Homeowners can also contact Fannie Mae by phone at (1-800-732-6643).
If you do not meet the HARP requirements for refinancing because of poor credit scores, late mortgage payments or subordinate financing like a 2nd mortgage then consider a loan modification. The Home Affordable Modification program is intended for borrowers who do not have the ability to make their mortgage payments, even with a refinance. To be eligible for Home Affordable Modification, the borrower is required to “document a financial hardship and represent that s/he does not have sufficient liquid assets to make the monthly mortgage payments.
Homeowners and first time home buyers were busy last week submitting their home mortgage and refinance loan applications into process in an effort to beat the looming deadline when the higher FHA insurance premiums are mandated. According to the Mortgage Bankers Association, borrowers rushing to beat an FHA mortgage insurance premium hike and a slight increase in mortgage refinancing applications helped increase seasonally adjusted application volumes overall by 5.3% during the week ending April 15, Overall, application for the “FHA refinance” rose 5.9% on an unadjusted basis, bolstered by a seasonally adjusted 10% increase in home purchase loan applications. This brought seasonally adjusted home buying to a high not seen since Dec. 3, 2010. Government mortgage applications spiked 17.6% during the week ending April 15. But while the four week moving average for seasonally adjusted home purchase applications was up 2.5% last week, unadjusted, purchases were still down 11.4% from the same week a year ago.
Consumers Raced to Lock in FHA Home Purchase and Refinance Loans Before Insurance Premium Increase Goes into Effect
The four week moving average for loan applications overall was down 2.9% as of the week ending April 15. For the most part, refinance loan volume has drastically decreased in 2011 as the pool for qualified borrowers has shrunk significantly. Higher FHA insurance premiums certainly haven’t helped loan origination for the FHA streamline program.
The MBA home refinance index increased 2.7% during the week ending April 15, possibly due to a decline in rates last Friday when the rate-indicative benchmark 10-year Treasury bond yield fell to levels closer to 3.4% from levels around 3.5%. On average during the week ending April 15, the contract interest rate for 30-year home loans with fixed rates fell to 4.83% from 4.98% the previous week, with points increasing to 1.07 from 0.93 of a point. For 15-year home loans with fixed rates, the average contract interest rate dropped to 4.07% from 4.17% with points falling to 1.02 from 1.22.
While mortgage refinance rate averages were up week-to-week during the week ending April 15, the four week moving average for the refinance index was down 5.7% and the market-share of mortgage refinancing activity dropped to 58.5% from 60.3%, marking the lowest share for refinance loans seen since May 7, 2010. The adjustable-rate home loan share was up slightly during the week ending April 15, at 6.5% compared to 5.9%.
Millions of homeowners took out home equity loans or credit lines over the last decade and many of these borrowers find themselves stuck with an adjustable rate or rate they are not comfortable with. Many borrowers have attempted to refinance equity loans to no avail. Second mortgage loan programs and underwriting guidelines have tightened considerably in the last few years. Home equity lenders are asking for borrowers to have more equity and higher credit scores. Since the housing crisis erupted, many homeowners have lost their equity thus being turned down by lenders in their efforts to refinance.
Refinance applications in the United States declined last week for the 6th consecutive week. Many economists attribute it to rising refinance rates and tighter lending requirements for refinancing. According to the Mortgage Bankers Association, refinance loan applications fell by 10% for the week ended March 25.
Clearly declining home values are hindering many borrowers for qualifying because they do not have sufficient home equity according to 2012 refinance guidelines. Foreclosures are also bringing the home values down and making the lenders more tentative in respect to loosening lending restrictions. Underwater mortgage refinancing is challenging as most borrowers do not meet the Home Affordable Refinance Program that was designed to help borrowers who have negative equity to get another chance at refinancing. The HARP refinance was recently blessed with aggressive guidelines that removed all “loan to value” restrictions. HUD’s decision to raise the insurance rates for FHA programs is only adding fuel to the fire as many borrowers are finding out that lower rates don’t always equate to lower monthly payments. Many consumers consider FHA to be a sub-prime loan, because they approve applicants with credit scores as low as 500.
Will Refinance Rates Continue to Rise?
Rising mortgage refinance rates continue to be a concern for borrowers who were unable to refinance last year when rates fell to record lows. Last week, the average 30-year fixed rate loan rose to 4.92 % from 4.80 %. Closing costs on refinance mortgages have also increased and privately this worries many loan companies fighting for market-share. The average 15-year fixed rate loan rose to 4.16 % from 4.02 %. MBA also revealed that the percentage of applicants seeking fixed mortgage refinancing dropped to 64.3 from 66.4 %.