About Government Refinance and Home Purchase Programs

Information and Updates on Government Mortgage Programs

[Update — The Fed and Obama administration have been compressing mortgage interest rates for some time now. Due to those efforts and other market factors, mortgage rates and APR’s on most 15-30 year fixed government-backed mortgages have recently been coming in between 2.75 and 4.5%. Contact us today to learn more.]

HOME PURCHASES

There are several government-backed home purchase programs designed to make it easier for Americans to buy a home. The goal of these programs is to allow for low down payments and to make it easier for people with less than perfect credit to qualify for a mortgage. With mortgage interest rates near historical lows and housing prices increasing across the country again, now is a terrific time to look into buying a home. Fill in the contact form on our home purchase programs page to learn more about the available government-backed purchase programs and perhaps to get pre-qualified for a home purchase loan.

HOME REFINANCES

For Homeowners Who Have Equity

There are several superb government-backed refinance programs for borrowers who have even a little equity in their homes and there are various good reasons to seek a refinance:

Contact us in the form in the sidebar to be pointed in the right direction on these refinance options.

For Homeowners Who Are Underwater Or Upside Down On Their Mortgage(s)

There are several options for the millions of U.S. homeowners who owe more on their home than the property is currently worth. Here are a few:

1. FHA Streamline Refinance — If you currently have an FHA loan, refinancing through the FHA streamline program is an excellent option. It is a low cost, low headache process designed to lower payments and interest rates. Fill in the contact form on this page if you have an FHA loan and would like to learn more about the FHA-to-FHA streamline program.

2. VA streamline (IRRRL) Program — For borrowers who have a VA loan now, the VA to VA streamline (also known as the IRRRL program) is a terrific, low cost way to significantly reduce payments and interest rates, even for borrowers who are underwater on their homes. If you have a VA loan contact us to learn more about the IRRRL program.

3. HARP Refinances — With President Obama’s HARP program, qualified homeowners can refinance a conventional first mortgage which is backed by Fannie Mae or Freddie Mac no matter how underwater they are. (See here to find out if your conventional mortgage is backed by Fannie or Freddie.) As long as the current Fannie or Freddie loan was started prior to May of 2009 there should be no loan-to-value (LTV) limits. Further, while the HARP 1.0 program did not work well for people currently paying mortgage insurance (PMI), the changes in the HARP 2.0 program allow borrowers with PMI to participate. The HARP program does not allow second mortgages to be combined with first mortgages but will allow the first mortgage to be refinanced with the second mortgage remaining in place as is (called a subordination). Contact us to learn more.

4. Loan Modification Programs — If you are unable to qualify for any other refinance program or if you are delinquent on your mortgage payments and are on the verge of foreclosing your best bet is often to seek a loan modification from your current lender. Loan modifications normally reduce mortgage payments by lowering interest rates or extending the loan period. Obama’s new “Home Affordable Modification Program” (HAMP) gives lenders incentive to modify troubled loans as well. See this page for strategies on seeking a loan modification.

Be sure to bookmark this site and check back for the latest updates on government-backed efforts focused on alleviating the housing crisis in the US (see stories below). To contact us about your options just fill in the contact form in the sidebar.

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LATEST GOVT-RELATED MORTGAGE NEWS:

Filed under Government Mortgage Financing Programs News

In the wake of the 2007 housing bubble bursting, adjustable rate mortgages (ARMs) got somewhat of a bad rap. The problem in the early 2000’s was too many borrowers were purchasing homes with ARMs without understanding how they work. The result was their ARMs began adjusting higher years down the road and unprepared borrowers found themselves unable to make their payments. But ARMs can be very useful loans when understood and utilized properly.

Paying a premium for 30 years mortgages

While 30 year mortgages are currently the most popular form of mortgage, they come at a cost. There is a premium, in the form of a higher interest rate, to be paid for the guarantee of keeping a rate fixed for 30 years. For homeowners who keep their mortgage a over the course of decades, that premium is well worth the security of a long term fixed rate. But the reality is that most people sell their home or refinance within 5 years of getting their mortgage. So most folks get a higher rate for the right to have a fixed rate for 30 years but then end up selling or refinancing a couple of years later anyway.

Who should get an ARM?

Folks who feel fairly confident they will sell their home in the next 5-10 years are excellent candidates for ARM mortgages. Rates on ARMs are significantly lower than rates on 30 year mortgages so refinancing to an ARM (or purchasing a home with an ARM) can lead to huge interest savings.

Contact us to get a quote on a government-backed ARM loan

If you think there is a good chance you’ll sell your home in the next 10 years contact us today to get an estimate on a refinance to an ARM. Rates on ARM lows are surprisingly low and a refi to an ARM could save you a ton of money over the next few years before you sell your home.

Comments (0) Posted on Tuesday, June 21st, 2016


Filed under Government Mortgage Financing Programs News

There was some question leading into yesterday’s Federal Reserve announcement whether the Fed would raise its short-term interest rate or not. The answer came back as a “no” for now. The Fed cited mixed economic reports in recent months in their decision to hold off on a rate hike. The Fed is looking for more clear signs that the U.S. economy is healthy and growing before hiking rates again, and there is no sure way to know when that will happen. Most pundits are forecasting that it will likely be September at soonest before a rate hike might be on the table again.

All of this means we can expect nice low mortgage interest rates for another couple of months at least. That means now is a great time to look into a refinance or a home purchase. With home values continuing to increase across the country, cash out refinances are becoming popular again. Increasing home values are also making homes more attractive as investments. Contact us today to get more info on available refinance and home purchase programs.

Comments (0) Posted on Thursday, June 16th, 2016


Filed under Government Mortgage Financing Programs News

The jobs report that came out about a week ago came in with a much lower number of new jobs created than analysts were expecting. While unemployment numbers are staying relatively low, the number of new jobs created in the economy was troubling to the financial community. The immediate result of the report was a pullback in the stock markets and a dip in the yields for government bonds. That dip in bond yields, as usual, correlated with a small dip in mortgage interest rates. So mortgage interest rates are looking good right now.

If you are considering a refinance or a home purchase, now is an excellent time to get the process started. Contact us in the sidebar for for refinance information, or on our home purchase page for info on home purchase mortgage programs.

Comments (0) Posted on Thursday, June 9th, 2016


Filed under Government Home Purchase Programs

The USDA Rural Development home purchase program just announced plans to significantly reduce fees starting this fall. Here is what the USDA said in a recent email announcement:

Upfront Guarantee Fee and Annual Fee Reduction for Fiscal Year (FY) 2017

This message provides advance notice of the upfront guarantee fee and annual fee structure that will be effective for Single Family Housing Guaranteed Loan Program (SFHGLP) loans in fiscal year (FY) 2017, which begins October 1, 2016 and ends at the close of business on September 30, 2017. The upfront guarantee fee will change from 2.75% to 1.0% of the loan amount. The annual fee will change from 0.50% to 0.35% of the average scheduled unpaid principal balance for the life of the loan.

Please refer to the unnumbered letter (UL), “Upfront Guarantee Fee and Annual Fee for Fiscal Year 2017,” for additional details.

The USDA RD program helps home buyers purchase homes with no money down, provided the the home is located in a designated rural area. See our home purchase page for more details on the program. This reduction in fees will make the USDA RD program an even more attractive option for home buyers.

Comments (0) Posted on Friday, April 29th, 2016


Filed under Government Mortgage Financing Programs News

Janet Yellen, the Chair of the Federal Reserve, gave a speech on Tuesday that sent stocks higher and the yield on bonds lower. The gist of Ms. Yellen’s speech was that the economy is showing signs of weakness and thus the Fed would not be raising its interest rates any time soon. As usual, mortgage interest rates dipped in concert with the dip in the yield on the 10 year T-Note. With signs of a possible new recession mounting, the Fed won’t want to do anything to make economic conditions worse in the short run. That is a good sign for folks looking to refinance or to purchase a home. Contact us today to get more information on available mortgage programs while rates are still near historical lows.

Comments (0) Posted on Tuesday, March 29th, 2016


Filed under Government Mortgage Financing Programs News

Mortgage interest rates began falling in January and hit a low point in mid February. The dip in mortgage interest rate coincides with the recent dip in stock prices. As investors have fled stocks to the relative safety of U.S. Treasury bonds, the yield on those bonds have dropped and as usual, mortgage interest rates have dropped as well. While there has been a small recovery in bond yields over the last few weeks, mortgage interest rates remain extraordinarily low. If you have been considering refinancing a mortgage or purchasing a home, now is an excellent time to start. Contact us today to be pointed in the right direction.

Comments (0) Posted on Monday, March 7th, 2016


Filed under Government Mortgage Financing Programs News

The stock market has taken a severe beating so far in 2016. The major stock indexes have been tanking for weeks now. While this is bad news for investors, it has become good news for folks looking to refinance a mortgage or buy a home. Mortgage interest rates have improved significantly in the last few weeks.

As usual, when stock market values drop quickly, investors race to safer investments like U.S. Treasury bonds. As more bonds got bought up the yield on those bonds drops. And as we’ve noted in the past, movement in mortgage interest rates tend to mirror the yield on the 10-year T-note.

There’s no telling how long this dip in rates will last, so contact us today in the sidebar to get an estimate on a refinance. Now is a great time to look into lowering interest rates, getting cash out, or shortening the term of a mortgage. Or contact us on our home purchase page to look into getting pre-qualified to purchase a home.

Comments (0) Posted on Wednesday, January 20th, 2016


Filed under Government Mortgage Financing Programs News

2015 has been a bumpy ride for mortgage interest rates. After dipping to two-year lows in February, rates rose sharply in March, dipped again in April, rose even more sharply in June, moved lower slowly through October, and spiked again in November. Staying with that roller coaster pattern, rates have been slowly moving lower again since a mild spike in early November. The spikes and dips in interest rates have largely been triggered by good news or bad news in the global economy. When positive reports have come out, the markets assume the Fed is ready to raise its baseline lending rates and mortgage interest rates jump up. As bad news arrives about the economy, doubts about the Fed making a move creep in and mortgage interest rates begin to dip.

While markets are unpredictable, one certain thing is that mortgage interest rates are currently still very low by historical measures. If you have been considering a refinance to improve your interest rate or to remove mortgage insurance or to get cash out, contact us in the sidebar while rates are still low. Likewise, if you are looking at purchasing a home, contact us on our home purchase page. While rates have bounced around this year, the overall range of interest rates is still surprisingly low.

Comments (0) Posted on Tuesday, December 1st, 2015


Filed under Government Mortgage Financing Programs News

With the global economy struggling the Fed decided to delay raising its baseline interest rates in September. As a result of that decision and the continuing gloomy news on the economy, mortgage interest rates have been slowly drifting lower again. The Fed seems anxious to raise rates again before the end of 2015 so there is a decent chance that mortgage interest rates will move higher in the next few months. If you have considered a refinance to a better rate, or a cash out refinance, or a refinance to remove or reduce PMI, contact us in the form in the sidebar. Mortgage interest rates are still near historical lows and odds are they won’t stay this low for long.

Comments (0) Posted on Friday, October 2nd, 2015


Filed under Government Mortgage Financing Programs News

After hitting a trough in late January of 2015, mortgage interest rates have been slowly trending higher over the last 7 months. But recent economic troubles in Greece and China have begun spooking investors of the last few weeks. When investors get spooked they tend to look for safer investments, like U.S. treasury bonds. When more people buy U.S. bonds, the yields on this bonds decreases, and mortgage interest rates tend to follow suit. The net result has been a small improvement in mortgage interest rates over the last couple of weeks.

Rates remain very low by historical standards so this summer is still an excellent time to look into buying a home, refinancing to a lower rate, or looking in to a cash out refinance. Contact us in the sidebar for more information on refinances or contact us in the form on our home purchase page for info on getting qualified to buy a home.

Comments (0) Posted on Saturday, August 1st, 2015


Filed under Government Mortgage Financing Programs News

Most people have heard of reverse mortgages. A reverse mortgage refinance is an FHA mortgage available to people who are at least 62 years old. The program allows folks with enough equity in their homes to stop making mortgage payments and remain in the home until they die. In many cases a reverse mortgage refinance can be an excellent option.

But did you know that there is such a thing as a reverse purchase mortgage? The same basic concept and rules apply. The borrower must be at least 62 year old and in the case of a reverse purchase, the borrower normally needs a down payment of at at least 40-50%. The appeal of a reverse purchase it allows borrowers to buy a home and then have no mortgage payment going forward for the rest of their lives.

If you are interested in learning more about reverse mortgages, contact us in the form in the sidebar for refinance information, or in the form on our home purchase page for info on reverse purchases.

Comments (0) Posted on Saturday, June 20th, 2015


Filed under Government Mortgage Financing Programs News

According to recent reports, average home values across America rose 6% in March compared to March of 2014. This is in line with the general trends we have been seeing with home values steadily rising. Increasing home values is good news for most current homeowners for several reasons:

1. Homeowners with mortgage insurance (PMI) will have an easier time refinancing to remove that PMI
2. Homeowners will have an easier time getting cash out refinances
3. Homeowners looking to sell will benefit from higher sales prices

Rising home prices are not a bad thing for folks looking to buy homes either. While home prices might have risen in the last few years, the fact that homes are again slowly, steadily increasing in value means that homes that are purchased in 2015 would increase in value over time if the trend continues. A slow, steady increase in home values is good both for home sellers and for home buyers in the long run.

With mortgage interest rates still extremely low, now in an excellent time to look into refinancing a mortgage or buying a home. Contact us today to get more information on the available government-backed mortgage programs.

Comments (0) Posted on Wednesday, May 6th, 2015