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Archive for No Cost Mortgage

Interest rates on fixed rate 30-year home loans for refinance or purchase officially hit record lows today! On Thursday, Freddie Mac released their report that also indicated the 5-year adjustable-rate mortgage dropped to record lows this week according to the survey of conforming mortgage rates.   The 30-year fixed rate mortgage reported averages of 4.69% for the week ending June 24th.  This was lower than the low rates of 4.75% from the previous week and 5.42% a year ago. Fifteen-year fixed rate mortgage loans averaged 4.13%, down from 4.20% last week and 4.87% a year ago. The 10-year fixed rate mortgage has fallen to 3.75% and 3.875% on the “no cost mortgage refinance” option.

VA home loans are still available at record low rates as well.  If you already have a VA mortgage and want a lower rate talk to one of our VA lenders about qualifying for the VA streamline.

Freddie Mac Says Lowest Fixed 30 Year Mortgage Loans Since They Began Recording Rates in 1971

Conventional and FHA mortgage lenders reported averages of the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.84% this week, down from 3.89% last week and 4.99% a year ago.

One-year Treasury-indexed ARMs averaged 3.77%, down from 3.82% last week and 4.93% a year ago. While not a record, this is the lowest the ARM has been since the week ending May 6, 2004, when it averaged 3.76%.

To lock into these home mortgage rates, the 30-year fixed-rate mortgage and both ARMs required payment of an average 0.7 point and the 15-year fixed rate mortgage required an average 0.6 point. A point is 1% of the home loan amount, charged as prepaid interest.  According to Frank Nothaft of Freddie Mac “Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the home-buyer tax credit”. “Freddie Mac began collecting rates for 30-year fixed loans in April 1971, 15-year fixed home loans in September 1991 and 5-year ARMs in January 2005.”


Letter to the Lender: We were recently shopping for a home refinance loan online and we received a handful of mortgage quotes.  Obviously we want the lowest mortgage refinance rates possible.  We also want a fixed interest rate on a 30-year term and if we can qualify for a no cost refinance mortgage that would be another benefit.  One of the lenders offered us a FHA refinance at 5% fixed on a 30-year term with no points and no fees.  Another lender offered us a FHA loan at 4.875% on a 30-year term with no points, but there is $3,000 in closing cost that we would either have to pay out of pocket or we could roll into the loan.  Which option do you think we should go with?  Is no cost mortgage refinancing always the best choice when shopping for a mortgage loan? Do you think we should wait for refinance rates to drop more?

First of all, if you have the opportunity to save money with a fixed rate while interest rates are at all-time lows, you should jump for the opportunity and move forward.  Although mortgage interest rates are extremely low today, it is very difficult to qualify for mortgage refinancing, because lenders have tightened guidelines significantly in an effort to minimize loan defaults and foreclosures.  Just because you qualify today does not always mean that you will qualify to refinance tomorrow.  For example, What if you are approved for a FHA mortgage at 96% loan-to-value now and FHA changes the guidelines to 95%?  What if there were several foreclosures on your street that brings your value down so that your loan to value balloons to over 100%?  These are both real reason why borrowers don’t qualify for a refinance loan that they once were approved for.

To answer your second question, I must understand your big picture first.
1. Do you plan on selling your home or moving any time soon? No, we would like to retire in this home.
2. What is the balance on your first mortgage? $385,000
3. What is your home’s appraised value? $495,000
4. Do you have a second mortgage and if so did you want to refinance the second mortgage with the new loan? No second mortgage
5. Have the lenders ran your credit and sent you loan disclosures with a Good Faith Estimate? Yes, we have 739 middle fico score and believe it or not we received loan disclosures from both loan companies.

Lender Recommendation: First of all I would recommend rather than going straight for a FHA loan that you get a quote for a conventional mortgage backed by Fannie Mae or Freddie Mac. FHA loans are great but you are below 78% LTV and you qualify for a prime rate loan with no mortgage insurance.  Unless you get a 15-year loan, FHA guidelines requires that you pay a mortgage insurance premium when you close the loan, in addition to a monthly insurance charge.  In your case that would save you over $100 a month by choosing a loan backed by Fannie or Freddie.  Regarding which refinance option to choose — While the no cost mortgage refinance is appealing but if you keep this loan for the life of the term you would save money by paying the $3,000 in closing cost and go with the lower rate option.  These are great refinance options and you could not go wrong with either mortgage loan.  Mortgage refinance rates are at record lows so the chances of interest rates improving are slim.  It certainly is not worth the risk of refinance rates rising, because there will be a time when they go up and do not come down…


Mortgage 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 home loan 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 advisers 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 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 refinancing loans will see closing costs in the $5,000 to $10,000 range and some have even higher lender fees.


No Cost Mortgage Refinancing

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If you have good credit, home equity and your interest rate is above 5%, chances are that you will benefit from no cost refinancing.  Qualifying for a no cost mortgage is not as easy as it was a few years ago.  For conforming, FHA and VA home loans you will need to document your income if you plan on qualifying for no cost mortgage refinancing.  Fannie Mae and Freddie Mac no longer allow no income mortgage refinancing so you will need to document your income if you want to qualify for a no cost mortgage.  For most of the conventional mortgage products you will need over a 700 fico score if you want to be eligible for the no cost mortgage refinancing incentives.

FHA and VA  have never allowed stated or no income mortgage options, so nothing has changed for income documentation requirements with government home mortgages.  FHA guidelines changed recently, so you will need good credit scores (0ver 640) if you work with a lender like Nationwide who offer no cost refinance options with the FHA loan program.

We continue to offer no point mortgage loans with most of our refinance programs.  With no point refinancing, a borrower will have no origination fees, but the 3rd-party lending fees like title, escrow and appraisal will be the borrower’s responsibility.  In most cases we can offer home refinancing with no closing costs out of pocket.  With mortgage refinance rates so low and no cost refinancing incentives, we strongly recommend taking advantage of our discounted loan refinance.