Archive for Mortgage Rate Articles
Mortgage Refinance Tips to Maximize Low Rates
Posted by: | CommentsMortgage refinance guidelines tightened this year, so many homeowners are being rejected by their lender for refinancing. Just when you think that you have seen the lowest mortgage rates ever, the interest rates get even lower. Most mortgage executives have indicated they believe the low rates won’t last and that mortgage rates will begin to rise again in 2011. With that being said, it is important to qualify for a mortgage refinance loan, now while the rates for home refinancing are so favorable. Nationwide loan officers provide mortgage refinancing tips at no cost.
Looking for an Affordable Home Refinancing Solution Online?
We outlined the top 3 mortgage refinancing benefits:
1. When refinancing, your new loan should have a mortgage refinance rate at least .5 percentage points less than your present interest rate.
Years ago most financial advisors had recommended mortgage refinancing if you could get a mortgage rate at least 1 percentage point less than your current mortgage. Well, the rules have changed, because refinance rates in recent years have been at historical lows, so a half point drop makes up a larger percentage of your existing rate.
2. Typically most people refinance into the same type of home loan they started, simply because they do not know any better. That can be a financial blunder that could cost the borrower thousands of dollars a year. If you are a few years into a thirty-year mortgage, don’t just refinance into a new mortgage because you save a little bit of money with a reduced mortgage interest rate. The new mortgage could be stretching out your payments over several more years, so you might not really be saving money. For example, let’s say you only have twenty years left on your existing home mortgage. If you can refinance into a thirty-year home loan you would be adding ten years to your existing mortgage loan. If you have the option to qualify for a no cost loans we recommend that you seize the opportunity.
3. Closing costs and lender fees should be recovered within the first 3-5 years or less. Closing costs factors should be considered before signing the paperwork need to close a loan. You’ve got to make sure the proposed mortgage rate makes sense on paper financially. Don’t assume that the closing costs are justified. Many home refinance loans will see closing costs in the $5,000 to $10,000 range and some have even higher lender fees.
MGIC Adjusting to Compete with FHA Loans
Posted 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.
Mortgage Rates on the Rise?
Posted 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.
