MGIC Adjusting to Compete with FHA Loans
By · CommentsFixed rate refinancing remains in high demand for homeowners who have an adjustable rate mortgage, but have not been able to qualify to refinance because their home is worth less than the their mortgage balance. Reuters reported last week that MGIC Investment Corp who is the largest home mortgage insurer in the United States, reduced its premium rates in an effort to recapture market share lost to FHA loans insured by the Federal Housing Administration. FHA mortgage rates have remained competitive with conventional interest rates since 2007.
The low mortgages rates have been available to consumers with high credit scores. Higher interest rates will be offered to borrowers with lower credit scores under the new pricing system. According to mortgage advisor, Sandy Sarconi, “MGIC may be too late reacting to FHA because they have taken 30% of the market-share.”
Presently, FHA loan guidelines do not consider credit scores when pricing its insurance for FHA mortgage loans. The new prices will be effective May 1, the company said. In January, MGIC reported its tenth straight quarterly loss because of increasing delinquencies. More and more homeowners are failing to make their mortgage loan payment on time. The company did make a statement that they anticipate home loan delinquencies to reduce towards the end of 2010.
FHA Mortgage Refinancing with No Equity
By · CommentsFHA offers loan programs for borrowers who need a FHA refinance loan but have no equity available because of the sluggish housing market. The FHA streamline refinance is great for the homeowner that has a wants a rate and term refinance. No cash out or debt consolidation is available with FHA streamline loans and certain restrictions do apply. To qualify for a FHA streamline, you must currently have a FHA mortgage that you are current on with no late payments in the last year. In late 2009, HUD made some changes to the FHA guidelines and a good payment history on your existing FHA loan is essential.
Let’s face it millions of homeowners owe more than their home is worth. Fannie Mae and Freddie Mac offer the Home Affordable Refinance Program and the DU Refinance Plus program that FHA allows you to refinance your mortgage without an appraisal (so the fact that your house’s value has dropped like a piano from the roof is irrelevant) if you meet certain guidelines.
The FHA streamline refinance has been surging in popularity with FHA lenders because it meets the needs of so many homeowners that are blessed with an FHA loan. FHA mortgage rates are as low as they have ever been and FHA loan companies have become much more efficient processing government refinance loans.
FHA Streamline Refinance Requirements
1. You have to have made at least six payments on your current FHA loan.
2. If you have had your FHA loan for less than 12 months, all the loan payments must have been made in a timely manner. If you have had the FHA mortgage for more than 12 months, you can have been late only once in the last year and must have paid on time the last 3 months.
3. Your new FHA loan payment must be at least 5% lower than your old payment, or you must be replacing an ARM with a fixed loan (the new FHA rate can’t be more than 2% higher) or hybrid loan (the new loan payment can’t be more than 20% higher), or reducing the term of your FHA loan, or reducing your interest rate by at least 2% (if replacing a fixed home loan with an ARM).
4. The property being refinanced must be your primary residence.
5. Closing costs for FHA streamline loans must be paid upfront (with the exception of mortgage insurance premium (MIP), which can be financed in the new loan.
Mortgage Rates on the Rise?
By · CommentsThe Federal Reserve has announced their intention to stop buying mortgage backed assets. The housing recovery is far from over, but the government believes that it is time to back off their aggressive stance to help stimulate the real estate market. Since the end of 2008, the Federal Reserve has been buying home loan securities and bundling the mortgages that are used to fund mortgage lending. In March, the Fed plans to complete its purchase of $1.25 trillion in mortgages, even though signs of a housing stability are nowhere to be found.
Most mortgage insiders have concluded that higher mortgage rates are on the horizon. But even if the Fed holds onto the mortgage loans it has already purchased, the act of no longer buying additional home mortgages is likely to increase mortgage rates in the coming weeks. Experts say a jump of at least a quarter to a half percentage point is likely. Mortgage refinancing activity continues to decline and home loan defaults have been reported at record levels.
San Francisco Federal Reserve President Janet Yellen warned of higher rates in a speech Monday. Fed Chairman Ben Bernanke is likely to take questions about the Fed’s mortgage program when he testifies about economic conditions on Capitol Hill Wednesday and Thursday.
The spread between the interest on 30-year fixed rate home loans and the benchmark 10-year Treasury note now stands at about 1.2 percentage points. Before the financial crisis, this spread was typically closer to 1.5 percentage points
To obtain the 30-year fixed-rate mortgage under 5%, borrowers would be required to pay an average 1.50 points. The 5/1 ARM looks good as borrowers can lock in at 4.25% with no points.
Mortgage Refinancing Benefits
By · CommentsMortgage refinancing can offer significant opportunities for homeowners to save money and get access to cash. Through home refinancing, it may be possible to reduce your monthly home loan payments and provide the ability for you to own your home outright quicker. Consider the peace of mind you obtain by refinancing an adjustable rate mortgage into a mortgage featuring a fixed interest rate. Many homeowners have benefitted from the debt consolidation option that is available with most cash out refinance loans. We recommend consolidating variable rate credit debt into a fixed rate home equity loan or mortgage.
- Record low rates starting at 4.625% fixed
- FHA refinance programs offer additional flexibility
- Choose from 30 and 40 Year fixed rate terms
FHA Premium Rising for Bad Credit Mortgage Loans
By · CommentsFHA loan programs may see changes in 2010. The HUD is seeking White House approval to increase the upfront mortgage insurance premium charged by the Federal Housing Administration to borrowers. FHA officials announced more changes, including tighter underwriting standards for refinance mortgages and new home loans. If approved by the White House, FHA mortgage loans will see an increase to 1.75% upfront mortgage premium paid by borrowers who do not have enough equity to mitigate the risk of a loan default.
Which Mortgage Refinance Loan is the Best for You?
By · CommentsThere are many important determining factors in choosing the best refinance loan for you and your family. The first question you need to ask yourself is which refinance programs do you qualify for. The second question to consider…What is the purpose for refinancing the home loan? What are the various options for refinance loan programs?
| • | Rate and Term Refinancing for Lower Payments |
| • | Cash Out Refinancing for Debt Consolidation |
| • | Save Money by Refinancing Home Equity Credit Lines |
| • | FHA 203k Loans to Finance Cash for Home Remodeling |
| • | 30-Year Fixed Rate Home Loans |
| • | 100% VA Mortgage Refinance |
| • | FHA Streamline Loans for FHA Borrowers |
| • | Combine 1st & 2nd Mortgage Loans for 1 Lower Payment |
Our mortgage refinance team offers a free consultation that usually reveals the best solution based your financial needs, goals and lending qualifications. Our experienced loan professionals can help you understand the details and differences between conventional and FHA mortgage loans. If you are considering a cash out or FHA streamline refinance, we will help you review the FHA requirements for mortgage refinancing.
Mortgage Rates Creeping Up
By · CommentsThe 30-year mortgage rates rose above 5% for the first time in a while. Conventional, jumbo and FHA mortgage rates rose slightly across the board. The Treasury department has announced that they will stop buying mortgage backed securities as 2009 winds down. The Feds will continue to purchase mortgage backed securities until March 31, 2010, as pledged earlier this year. But what happens after March 31st?
There really is no security in this investment anymore. Few, if any investors actually service the loans, and with the housing industry still very weak, and loan servicers holding almost all the power over the loans, investors are no longer flocking to purchase the loans from the original lenders. The lenders control modifications, payment forebearance rights, collections pricesses, foreclosure proceedings decisions, etc.
It is predicted that in order to entice investors, mortgage rates will have to rise dramatically in the near future. We are hearing rates numbers in the mid 5% range up to “the sky’s the limit” types of rates.
Refinancing Second Mortgage Loans
By · CommentsIf you took out an equity line or second mortgage in the last five years, we recommend you refinance it while rates are so low. Home equity loans and HELOCs were pretty easy to get a few years ago, but with the credit crunch and subprime mortgage melt-down, 2nd mortgages have become tough to obtain and even more difficult to refinance unless you have enough equity to refinance it into your first mortgage.
A second mortgage provides you the ability to eliminate your variable rate 2nd mortgage into a fixed rate mortgage with more stable terms. In most cases, refinancing adjustable rate loans and HELOC’s will save you thousands of dollars a year in interest by converting the compounded interest to a simple interest loan. If you are considering mortgage refinancing and want to get cash out with a FHA mortgage that lets you to borrow up to 95% of LTV. Take advantage record low rates and refinance your second mortgage and enjoy the financial benefits.
California Mortgage Rates Rebounding
By · CommentsAccording to California mortgage lender, Bryan Dornan, “Record low rates have made a significant impact on the housing recovery statewide.” 30-year fixed California mortgage rates have been reported as low as 4.5% for conforming and FHA loans. Unfortunately for many local residents, California home loans are more difficult to qualify for because stated income and no document mortgages have all but disappeared. The higher California FHA loan limits have been able to broaden the scope for many new borrowers to qualify for refinancing.
Yesterday, the Federal Reserve announced they were keeping mortgage rates unchanged and extending the government mortgage buying program which is good news for Americans but great news for borrowers living in California. 2010 may be the year that California home values rebound and many distressed homeowners have found comfort with the Home Affordable Refinance Program because it enables borrowers with no equity to refinance their Fannie Mae or Freddie Mac loans up to 125%.
Fed Keeps Mortgage Rates Low
By · CommentsThe Fed announced today that they were keeping mortgage rates unchganged. Refinance loan applications rose respectively due to the demand for distressed homeowners to refinance into a more affordable loan featuring a fixed interest rate. Conforming and FHA lenders have announced tighter lending guidelines for refinancing and home buying.
According to Mortgage Bankers Association, the home mortgage rates rose for the 2nd straight week to 4.92% from 4.88%, based on the MBA weekly interest rate report Home loan applications held relatively steady, too, increasing only .3% on a seasonally adjusted basis. Applications for refinancing represented 75.2% of all applications.
Mortgage refinance rates for a fifteen-year loan maintained 4.33%. These fixed-rate mortgage loans accounted for nearly 20% of refinance mortgage applications in October, Ruth Simon reports in today’s Wall Sreet Journal. That’s up from 9.1% a year earlier and 7.5% in October 2007.
Many loan applicants are interested in the fifteen-year mortgage rates because they have reached such low levels. However, borrowers who are used to a 30-year mortgage payment may suffer from sticker shock, because even with a 4.375% rate, the 15-year mortgages have a higher monthly payment. Mortgage rates have been at near-record low territory for the last couple of months, but the good news for 2010 was received as the Federal Reserve announced they were extend their program in which the government buys mortgage loan securities in the upcoming year.
Mortgage Bankers Association Sees Home Refinancing Trend
By · CommentsIn a recent article, the MBA forecasted mortgage trends for 2010 interest rates, mortgage refinancing activities and more. According to Mortgage Banker Association’s Weekly Application Survey, thirty-year mortgage loans with fixed rates dropped through November, falling 18 basis points relative to the month prior and ending November at 4.79 %. Fifteen-year home mortgage rates reached a new record low for the survey of 4.27%. The percentage of borrowers selecting the 15-year has risen in 2009 as a result of the widened spread between 15- and 30-year home loans. MBA forecasts that 30-year mortgage rates will rise through 2010 to end the year at 5.7%. In addition to conventional loans, MBA believes that both VA and FHA mortgage rates will rise a percentage point between now and 2011.
On a seasonally adjusted basis, home purchase loans applications declined almost 20 % from October to November. Mortgage refinance applications rose by about 1% over that time. MBA projects that mortgage loan originations will decrease from almost $2.0 trillion in 2009 to about $1.5 trillion in 2010. MBA forecasts that purchase originations will increase from $718 billion in 2009 to $804 billion in 2010, while refinance loan originations are projected to fall from $1.246 trillion to $693 billion. The Federal Reserve and U.S. Treasury home loan programs continue to dominate the secondary market. In November, Federal Reserve purchases of agency MBS accounted for about 80% of new MBS issuance from Fannie Mae and Freddie Mac.
FHA Mortgage Rates Dip
By · CommentsAfter four days of rising home mortgage rates ended today as consumers can now lock 30-year mortgage rates starting at 4.375% today. Conforming and FHA mortgage rates increased 0.25% to .375% last Friday and many borrowers put their refinance loan on hold hoping for rates to come back down. News came from HUD Friday that the Federal Housing Administration has decided to tighten credit standards for FHA home loans. In 2010 FHA lenders will be required to carry large bonds with significantly higher net-worth requirements for companies that plan to originate FHA loans in the future.
FHA loan defaults and foreclosures have caused HUD to reconsider FHA requirements and loan guidelines. Mortgage refinancing activity continues to be robust even through the Christmas season, because so many borrowers stand to benefit from a refinance loan that reduces their mortgage payments by hundreds of dollars.
Fed Committed to Low Mortgage Rates for Refinancing
By · CommentsToday the Federal Reserve renewed their commitment to low mortgage rates in an effort to help the housing sectors rebound across the nation. Just a few months after the Obama loan relief rolled out the Home Affordable Refinance Program that enabled borrowers who were upside down refinance into a fixed mortgage up to 125% of the property’s value. The federal government continues their push for rate and term refinancing and it appears they will not let something petty like equity get in the way of qualifying for a refinance loan.
FHA mortgage rates remained below 5% on 15 and 30-year home loans again this week. While conforming and VA mortgage rates continued to hover the 5% realm for mortgage refinancing and new home purchase loans.
Home Affordable Refinance Program and 125 Mortgage
By · CommentsEarlier this year, the government announced several new obama mortgage programs including the Home Affordable Refinance Program that extends refinancing to borrowers with 125 mortgage alternatives. The Home Affordable Refinance loan enables borrowers to qualify for a 125 refinance that enables homeowners to borrow up to 125% of the properties appraised value. This is not to be confused with the 125% home equity loan that borrowers would use for cash out and debt consolidation for credit card debt. The Affordable Home Refinance Program is a rate and term refinance that does not allow cash out or consolidation. Qualifying borrowers must currently have a Fannie Mae or Freddie Mae home loan that does not exceed $417,000. Borrowers need a 620 credit score and only one 30-day late mortgage payment is allowed with compensating factors. This latest obama mortgage may create an opportunity for millions of homeowners to refinance into a low fixed rate mortgage even if the borrower is upside down on their home loan.