Government Refinance Assistance

In an address in Fall Church, VA this morning President Obama fleshed out some of his new plan to help more Americans take advantage of the record low rates we are currently experiencing. The plan reportedly will lean heavily on the FHA and is designed to reduce barriers for folks who are not able to take advantage of the government-backed refinance programs already in place.

The major kink in the new plan is that the Republican controlled congress must approve it and the $5-10 billion price tag that comes along with it. Odds of that happening don’t seem high.

Even so, there are several very useful government-backed refinance programs that are already up and running well, including the FHA streamline program, the HARP program, and the VA IRRRL program. Contact us in the the sidebar to learn which programs might assist your family.

In his State of the Union address this evening President Obama announced plans for a new refinance program that is reportedly going to be targeted to borrowers who are having trouble taking advantage of the government-backed refinance programs already in place. We get the following from a WSJ article on the subject:

President Barack Obama called on Congress during Tuesday’s State of the Union address to approve new legislation that would give all homeowners who are current on their mortgages the opportunity to refinance at record low mortgage rates, officials said Tuesday.

Administration officials declined on Tuesday to outline the mechanics or costs of the program, and they said those details would be spelled out in the legislation in the coming days. “Responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief,” Mr. Obama said. ” No more red tape. No more runaround from the banks.” …

Unlike the existing program, which was unveiled in 2009, the latest proposal wouldn’t limit such opportunities to borrowers whose loans are already backed by mortgage giants Fannie Mae and Freddie Mac, which guarantee about half of all outstanding loans.

While details on the new program are forthcoming, there are several very useful refinance programs already in place. Contact us in the sidebar to learn more about the available programs.

As we begin 2012 interest rates on mortgages are testing new lows. Borrowers with excellent credit and plenty of equity are seeing 30 year fixed rates below 4%. Rates are not quite that low in cases where credit is less than excellent or when there is little or no equity in the home but even in those cases the rates are astonishingly low right now.

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

While interest rates on mortgages have been relatively low ever since the federal government began compressing rates in 2009, mortgage interest rates have been especially low since about August of 2011. The recent dip in rates was due to both global economic factors and actions from the Fed. As we enter 2012 mortgage interest rates remain near all time lows. When you combine the especially low rates with the government-backed refinance programs like the FHA and VA streamline programs and the new HARP 2.0 program that will become operational in the next few months, now is a terrific time to look into a government backed refinance.

Contact us in the sidebar to learn more about the government-backed refinance programs that might help your family as we launch into a new year.

With interest rates near record lows and new government-backed refinance programs being announced many Americans have considered looking in to a refinance. If you are among those people thinking about looking into a refinance, getting started in December has some practical advantages. The most important of these advantages is quite simple: shorter lines. Because of all the distractions from the holidays fewer refinances tend to be originated in December. The result is that the wait times for things like processing and underwriting tend to be much shorter. Starting the refinance process in December and closing the new loan in January is a great way to save time and get extra attention during your refinance process.

Contact us in the sidebar today to learn more about available programs, get an estimate, and possibly get the ball rolling for a January refinance.

The wave of bad economic news from Europe has served to help keep mortgage interest rates near record lows here in the US. As worldwide investors seek safe havens for their money the yield on the 10 year treasury note has remained low which in turn is keeping mortgage interest rates stunningly low by historic standards.

Contact us in the sidebar to see which government-backed refinance programs can best help your family.

In 2008 the loan limits on FHA mortgages were increased to allow more borrowers across the country qualify for FHA loans. On October 1st of this year those loan limit increases expired and reverted back to their original levels. After several weeks of debates in congress a bill reinstating those higher loan limits through the end of 2013 was passed and that bill was signed into law by President Obama on Friday. While this change will not affect a huge number of people, it will open up FHA loans to more Americans. To learn what the loan limits are in your county see this web site. (Note: it might take a few days for the new limits to be updated there.)

If you have an FHA loan now or would like to learn more about refinancing into an FHA loan contact us in the sidebar.

After hitting record lows at the end of September mortgage interest rates climbed slowly but steadily through most of the month of October. Rates increased in October in large part due to the news that Europe had worked out a temporary fix to their debt problems. But as October came to a close the European debt crisis hit a new snag which in turn led investors worldwide to purchase more US bonds which in turn is improving mortgage interest rates again. The excellent rates combined with the recently announced of an expansion of the Home Affordable Refinance Program (HARP) make now an excellent time to look into an government-back mortgage refinance. Contact us in the sidebar to learn more.

The Wall Street Journal reported earlier this week on a new plan to help more underwater homeowners refinance to lower interest rates despite owning more on their home than the current market value. We get this from the article:

The plan under consideration would make refinancing available to some borrowers whose houses are worth less than their loans, so long as they are current on mortgage payments, according to people familiar with the matter. Such borrowers typically aren’t able to refinance because they lack equity in their homes. The plan would apply only to mortgages owned by the banks. It isn’t clear how many of those borrowers would qualify for help. Around 20% of all U.S. mortgages are owned by U.S.-chartered commercial banks; the majority are held by investors in mortgage-backed securities.

The concept is still very short on details and seems to only apply to a fairly narrow range of people. But at least it is a sign that regulators a serious about opening new programs up for underwater borrowers who currently are not able to take advantage of the HARP program or FHA streamline program. We’ll keep you posted as more news on this subject comes out.

In the meantime contact us in the sidebar to see which programs you might already qualify for. While rates are up slightly from the lows reached near the end of September they are still hovering near all time lows.

Freddie Mac recently reported that mortgage interest rates last week were the lowest since they started tracking rates in the 1970′s. While rates raised a bit again this week there is speculation that the all time lows could be tested again in October in response to the Fed buying mortgage backed securities starting in October.

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

The Fed announced a new plan today that will likely compress mortgage interest rates even further. Here is an excerpt from a HousingWire piece on the subject:

The committee also said “to help support conditions in mortgage markets” it will reinvest principal payments from agency debt into agency mortgage-backed securities.

That’s a departure from the Federal Reserve’s previous practice of reinvesting those proceeds into Treasuries and appears to be an effort to lower mortgage rates.

The purchase program, to be completed by the end of June, will involve longer-term Treasury securities with remaining maturities of six years to 30 years, and will be financed through the sale of shorter-term Treasuries with maturities of three years or less.

“This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the FOMC said in a statement following its two-day meeting.

Contact us in the sidebar to learn about which programs could help your family.

As expected, part of President Obama’s recently revealed jobs plan was a plan to make it easier for more Americans to refinance their mortgages to the historically low interest rates we have been seeing in the last month or so. The president outlined his plan last night and it looks like main idea is to make it easier to qualify for the already existing Home Affordable Refinance Program (HARP). Here are some quotes from a Reuters article on the topic:

President Barack Obama said on Thursday he is seeking to broaden U.S. homeowners’ access to mortgage refinancing in a plan to help the ailing housing market and put money back in the pockets of borrowers needing help locking into record low rates.

“We’re going to work with Federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent,” …

The White House officials said the U.S. Treasury was having talks with both Fannie Mae and Freddie Mac and their regulator — the Federal Housing Finance Agency — on ways to broaden refinancings. The aim is to is to “remove the barriers that exist in the current refinancing program.” …

The refinancing initiative under consideration by the Obama administration would need final approval from the acting head of the Federal Housing Finance Agency, Edward DeMarco. Those close to DeMarco say he is acting as an independent regulator with the goal of conserving the assets at Fannie and Freddie, a position he has staunchly defended before lawmakers since the two firms were taken over by the government three years ago.

The encouraging news is that the Obama Administration does not appear to need the approval of the Republican-led congress to make access to the HARP program easier. Rather the administration mostly needs to persuade the independent head of the FHFA Edward Demarco that their plan is sound.

We’ll keep you posted on the progress of this new initiative. In the meantime, contact us in the sidebar to see which government-backed refinance programs you already qualify for.

As investors all over the world become increasingly nervous about world economic conditions more and more are buying up US treasury bonds as a safe haven for their money. That in turn is reducing the yield on US treasury bonds which in turn has continued to compress mortgage interest rates. The end result is that rates on government-backed mortgages are at astonishingly low rates this month.

Contact us in the sidebar to learn more details on the programs and rates connected with government-backed refinances. Dips in interest rates this steep normally don’t hold for long.

There has been a lot of speculation that President Obama will include a new mortgage assistance program as part of his speech this evening. We get this from a recent MarketWatch article:

President Barack Obama may suggest changes to a struggling housing refinance program to try to double the participation in the program and help kick start the economy in his speech before Congress on Thursday night, regulatory analysts said. …

The Federal House Finance Agency, which regulates Fannie and Freddie, may be considering a number of approaches to expand the participation of both lenders and so-called “underwater” borrowers of Fannie and Freddie-backed mortgages who owe more than their homes are worth. However, regulatory observes insist that all these approaches increase costs to taxpayers and damages mortgage investor confidence.

Of course whatever he pitches probably won’t make it past congress so on the ground level it likely won’t make much immediate impact. But it will be interesting to see what the plans are anyway.

The fairly recent changes in the way the FHA handles its mortgage insurance requirements have made the upfront costs of getting an FHA loan less expensive while making the monthly costs are higher. To recap, the one-time upfront mortgage insurance premium to get into an FHA loan dropped from 2.75% to 1%. On a $200k loan that is nearly a $4000 reduction in fees. However, the ongoing mortgage insurance (MI) fees on FHA 30-year fixed loans went up from .55% per year to 1.15% per year. So on that $200k loan the monthly MI went from about $92 per month up to $191 per month.

But with FHA 15 year mortgages the rules are different. With FHA 15 year mortgages the upfront fee remains 1% but the ongoing mortgage insurance is 0.25% per year for loans where the loan-to-value (LTV) is 90% or less. (This means the loan is 90% of the appraised value of the home or less). When the loan-to-value is more than 90% the mortgage insurance is .50%. So on that $200k loan the monthly MI fee would be $41 for lower LTV loans and about $82 for higher LTV loans. With the average rates on an FHA 15 year loan below 4% lately a 15 year loan might be worth looking into.

As an example:

A $200k 30 year fixed loan with PMI at a 6% rate (not an uncommon loan a few years back) would have a very similar monthly payment as the same loan at a 15 year 4% fixed rate with low PMI. But over the life of the 15 year loan the borrower would save more than $160k in interest payments alone when compared to the 30 year example. And that is not to mention thousands in saving in PMI payments and the fact that the home would be paid off twice as quickly.

15 year loans aren’t for everybody but they can be a terrific choice for many families. Contact us in the sidebar to look into your options on this subject.

This afternoon the Fed made the unusual pledge to keep its lending rates at record lows for a full two years more. This action was undoubtedly spurred by the recently faltering US economy. The Fed seems to want to bring some confidence and stability back into the market.

Early results were encouraging. Not only was there a rally in the stock market, mortgage interest rates dipped pretty substantially mid-day. If you have considered lowering your interest rate now is the time to get a quote on one of the government-backed mortgages programs. Contact us in the sidebar for guidance on getting an estimate.

Over the weekend S&P lowered the credit rating of the United States from AAA to AA+. As a result stocks have taken a beating over the last few days. Yet despite this announcement from S&P, mortgage interest rates on government-backed mortgages have dipped even further this week. Part of the reason for that is that mortgage interest rates usually follow the yield on the 10 year treasury note and the yields on those T-notes has continued to drop.

While decreasing values on Wall Street is not a good thing, it has not been a bad thing for mortgage interest rates for now. Contact us in the sidebar this week to learn which government-backed refinance programs could help your family while rates remain near 50-year lows.

VA Loans are mortgages that are available to the families of US military veterans. For folks who are eligible, VA loans have some terrific benefits. Here are some of the positives of refinancing into VA loans:

- You can get up to 100% of the current value of your home. This is true even when the the refinance is rolling in a first and second mortgage (unlike HARP and FHA loans)
- There is no monthly mortgage insurance fee associated with VA loans (unlike FHA loans)
- Rates on VA loans tend to be quite low
- Overall lender fees on VA loans tend to be lower than other loans

Having said that, there is an upfront funding fee associated with VA loans. For that reason refinancing into a VA loan is not always the best option even for borrowers with VA eligibility. Still in some cases refinancing into a VA loan is an excellent solution.

Contact us in the sidebar to learn more about refinancing into a VA loan as well as the other government-backed loan programs that are available.

With the US Congress finally agreeing on a deal to avoid defaulting on US debts, demand for US bonds picked up again this week. As a result of that increased demand the yields on the 10 year T-note have been dropping and as usual mortgage interest rates are dropping as well. The upshot of it all is that rates on government-backed mortgages are very close to 50 year lows again this month.

But with so much uncertainty in the world economy right now there is no telling how long these low interest rates will be available. If you have considered refinancing your mortgage contact us in the sidebar this week to see if there are government-backed mortgage programs that could benefit your family.

If you are tracking mortgage interest rates here is a useful trick that could help. It is not widely known among the public, but mortgage interest rates tend to track to the yield on the 10-year treasury note. When the yield on the 10-year T-Note goes up mortgage interest rates tend to go up, and vice versa. So if you are wondering about mortgage interest rate trends a quick and easy way to gauge things is to look at the trends on the 10-year treasury notes. See here for an example of the last three months of that 10-year T-Note. Mortgage interest rates on 30 year fixed loans tend to be between 1.5% and 2.25% higher than the yield on this 10-year note. (Although that can vary depending on other market factors). Still in terms of macro trends on rates this is a useful tool.

As of this week yields on the 10-year note have been dropping for more than a month so interest rates have generally followed suit. That means now would be a great time to contact us in the sidebar to learn which government-backed mortgage programs might work for your family.

Mortgage interest rates began dipping again in recent weeks as bad news economic news has continued to surface. With the disappointing jobs numbers that came out recently and continuing economic struggles in Europe more and more investors have been fleeing to the relative safety of US bonds, which in turn has been lowering the yield on those bonds. As we have discussed in the past, when yields on the 10-year treasury note drop mortgage interest rates normally follow. The end result is that rates on conventional and government-backed mortgages are continuing to slowly drop this week.

Of course such trends are always temporary so contact us in the sidebar this week if you have considered a refinance. With the debates over the debt ceiling still raging in Washington DC there is no telling how long it will be before rates move higher again.

The short answer to this question is: Not much so far. Mortgage interest rates on government-backed and conventional loans have remained near historic lows over the last few weeks as demand for the 10 year T-Note remains high and thus the yield remains low. But if a deal is not reached between Congress and the White House by August 2nd it is feasible that the demand for US bonds will dry up and that in turn could lead to a spike in interest rates.

If you have been considering locking in a lower rate on your mortgage it might be safest to lock in your rate soon. There is a lot riding on the debates between the GOP and the Democrats right now in Washington. All sides seem to believe a deal will get done but in the off chance it doesn’t rate could potentially go significantly higher in August. Contact us in the sidebar for more information on refinance programs that might apply to you.

There was a pretty good article over on Foxbusiness.com with some housing market predictions for the second half of 2011. One of the predictions that we think is likely is that while mortgage interest rates are likely to remain low by historical standards, they are unlikely to remain as low as we have seen in the recent dip that has from May to June. In fact, in the last week of June we already saw a small sell off in bonds which caused mortgage interest rates to start rising again for the first time since April. We expect that rates will rise somewhat in the coming months for all mortgage types, including government-backed mortgages.

If you have been rate watching as you consider a refinance now is probably a good time to contact us in the sidebar to learn which programs might work for you and to get some estimates put together.

Here is a quote from that article mentioned above:

Mortgage rates are near record lows, but some mortgage experts say the party won’t last long as they expect rates to climb in the next few months. They don’t foresee a major spike, but rather an adjustment to bring them back to “normal” levels.

Have mortgage interest rates already bottomed out? That is the question as we head into the summer of 2011. The bad economic news that has been appearing lately has not been all bad. As the stock market has staggered in recent weeks demand for bonds has increased. That in turn has compressed yields on bonds which has further compressed mortgage interest rates across the board. As a result mortgage interest rates are again approaching all time lows.

If you have considered refinancing to a lower interest rate or would just like to lower your mortgage payments now is a great time to do some research. Contact us in the sidebar to get more information on the various government-backed mortgage programs available.

New reports out are suggesting that housing prices in the US might not see a bounce back until 2014. Here is an excerpt from the recent HousingWire article on the subject:

A lack of demand may keep house prices from a consistent rise until 2014, according to analysts at Capital Economics.

Home prices double-dipped in the first quarter, according to the Standard & Poor’s/Case-Shiller index. While other indices measured some improvement since, analytics firm Altos Research forecasted an up-and-down market for some time. In the near term, Capital Economics said foreclosure sales should keep house prices down 3% in 2011, resulting in another 5% for the year as a whole.

Easing the flow of foreclosures on the market may stabilize prices to 35% below the peak in 2006.

“But while prices tend to rise rapidly in the years after downturns, this time a chronic lack of demand means that they will probably be unchanged in both 2012 and 2013,” Capital Economics said.

The upshot of that is that if you were thinking about selling your home as soon as housing prices bounced back you are probably going to have to wait a few years before that happens. With that in mind, it might make sense to consider refinancing into a lower rate mortgage now while rates are flirting with all time lows.

Contact us in the sidebar to learn more about the programs that are available.