About Government Refinance and Home Purchase Programs

Information and Updates on Government Mortgage Programs
Filed under Government Mortgage Financing Programs News

The effects of the Fed’s “QE3” are in full swing now in the mortgage markets. Mortgage interest rates broke all time lows last week and are remaining low this week. That means that in most cases 30 year fixed rates are in the 3’s and 15 year rates are in the 2’s right now.

Some homeowners who have already refinanced are wondering if doing so again will make sense. That question must be answered on a case by case basis, but there are some general factors to look at:

1. How long do you plan to own the home? If you plan to live in the home for decades more, 30 or 15 year fixed mortgages are the way to go. But if you are confident you will sell the home in the next 5-10 years it makes sense to look at a 5-10 year adjustable rate mortgage (ARM). Rates on government-backed ARM’s are in the 2’s right now and rates that low can significantly reduce payments for the next 5-10 years before you sell the home.

2. How much lower can your rate get with a refinance? If your rate is already in the 3’s on a 30 year fixed mortgage it might be hard to justify a refinance again. But if you are in the 4’s or higher it will be worth getting an estimate. On larger loans even lowering the rate by a quarter or half percentage point can make a big difference.

3. How long will it take to break even on the refinance? Sometimes you can get a truly no-cost refinance where the authorized lender pays for all of the costs and rolls nothing into the loan. This is most common with FHA to FHA or VA to VA streamline refinances. In such cases the break even is immediate so refinancing in such cases is often a no-brainer. If you have and FHA or VA loan now contact us in the sidebar right away. There are normally closing costs rolled into the loan on conventional and HARP refinances but if you can get a significantly lower rate in break even on all closing costs in 1-2 years such a refinance can make a lot of sense too — especially if you plan to own the home for several years to come.

To get more info fill in the contact form on the right. There has never been a better time to refinance to a government-backed mortgage. This is true for borrowers who have equity or those who are upside down / underwater alike.

Comments (0) Posted by G.R.A. Admin on Wednesday, October 10th, 2012


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