Archive for Conventional Refinancing
Conventional vs. FHA Refinancing
Posted by: | CommentsIn today’s tough economy borrowers need all the savings they can get so comparing conventional and FHA refinancing options is a smart move. Now more than ever, homeowners who need to refinance like to compare traditional loan options to government mortgage programs. There are benefits to both a conventional and FHA mortgage, so the pros and cons come into play based on your needs and loan eligibility.
Compare Conventional and FHA Refinance Loans
The Federal Housing Administration provides a number of options for homeowners, from loans to refinancing. Refinancing a home can be an excellent way to reinvest in your property, and offers a number of different benefits. There are a number of key differences when it comes to conventional vs. FHA refinancing, and knowing these differences can help you tackle the prospect of refinancing your home a little more easily. Here, we’ll go over some of the basic information behind a conventional and FHA refinance, respectively, so that you can decide which is right for you.
HUD has extended FHA refinance guidelines to offer several options for homeowners. The first type of FHA refinance is the cash out refinance, which is typically chosen by home owners whose property has increased in value since they originally purchased it. Cash out refinancing enables the home owner to refinance an existing mortgage by taking out another mortgage for more than they currently owe. On the other hand, home owners also have the option of a streamlined refinance, which is called such because it enables the homeowner to rapidly reduce the interest rate on the current loan. This can usually even be done without getting an appraisal, cutting down on paperwork and saving you time and money.
One benefit of FHA refinancing is the streamline refinance option. With the FHA loan, borrowers get quick access to home refinancing if interest rates fall below the rate they locked into. The streamline refinance program enables borrowers to revise their terms without an appraisal and in most cases without income documentation. With the conventional loan there is no streamline mortgage refinance option, so borrowers would need to start the process all over again.
FHA mortgage refinance programs are only available to home owners who are using the property they wish to refinance as their principal residence. Conventional refinance loans have very strict guidelines and requirements, such as higher credit scores. Conventional refinancing can sometimes incur penalties if the refinancing is not done at the proper time, and thus sometimes people can get trapped into not being able to refinance when they want to. That said, one disadvantage of FHA refinancing compared to a conventional mortgage is that FHA insurance is not cancelled when the home owner reaches 22% equity, although some home owners are eligible for an FHA insurance refund.
Great Rates on FHA and Conventional Refinance Loans
Conventional vs. FHA refinancing requires some careful consideration, and there are certainly advantages to each. Years ago, FHA mortgage rates were a bit higher, but these days conforming and FHA rates are typically the same. Today, most lenders offer the FHA mortgage product because it is available to those with poor credit scores and is more flexible than a conventional mortgage.
One thing to keep in mind though is that HUD has promised increased fees and mortgage insurance premiums for FHA loans, so refinancing with FHA could lose some luster if the insurance hike swallows your savings. Taking these factors into account can help you get the best type of mortgage for your family, and get you the home you want.
Do Low Rates Always Translate to Mortgage Refinancing?
Posted by: | CommentsThere is no question that 2010 has opened up some great mortgage refinancing opportunities for many homeowners to save money. Home refinancing is not always the answer though, because some borrowers already have low rates and some borrowers simply do not meet the refinance requirements. We recommend considering your mortgage refinance options carefully. Home mortgage rates fell this week to their lowest point on records that mortgage company Freddie Mac has kept since 1971. Today’s mortgage refinance rates when averaged around 4.625%. These rates are for 30-year fixed rate terms. The previous record of 4.71 % was set in December. 15-year mortgage rates average at 4.375% and the 5-year hybrid ARM average 3.875%.
Here are some answers to common questions that come with home refinancing.
Question: How much are the mortgage refinance costs?
Answer: In most cases, a refinance loan will cost $2 -$3,000 in closing cost. The common lending fees are underwriting, processing, escrow, title and appraisal. Many lenders will also charge origination fees, also known as “points.”
Question: Do I qualify for a no cost refinance?
Answer: It depends… Many lenders are offering no cost mortgage refinance loans, but the credit score minimums typically range from 720-740.
Compare Mortgage Refinance Rates
Posted by: | CommentsMortgage rates fell to a record-low last week, with the rate of a 30-year fixed loan dipping to 4.69 %. Borrowers who have been waiting for the best time to refinance their home find themselves in a good position.
Is Your Home Mortgage Rate Higher than 5%?
Some economists anticipate that mortgage refinance rates will remain low for at least another six months. However, if you are considering mortgage refinancing and you qualify under the 2010 refinance guidelines then you should not wait.
The current mortgage refinance rates are the lowest they have been since 1971 so the chances of them getting lower are slim. The chances of mortgage lenders tightening home refinance guidelines are much greater. If you are eligible to refinance today, take advantage of these record low interest rates and lower your mortgage payment.
Many home finance analysts feared how the mortgage market would once the tax credit for homebuyers expired on April 30th. A recent published report released earlier this week indicated that new home sales plunged nearly 33% last month. Compare lenders so you can get the best mortgage refinance rates online!
Let’s compare mortgage refinance rates: A year ago, the average mortgage refinance rate was 5.22% and 10 years ago, people were refinancing at 8.15%. Today, the average 30-year mortgage rate is 4.675% and the average 10-year mortgage is now at 3.875%. The banks continue to extend low mortgage rates because to the instability in the market and the European debt crisis.
Shopping Online for a Mortgage Refinance Loan
Posted by: | CommentsMortgage refinance continue to tumble, but which borrowers qualify? Unfortunately, even with a significant amount of home equity, most borrowers will not qualify for home refinancing because of the tougher credit guidelines that were recently implemented by mortgage lenders on conventional and FHA mortgage products.
Homeowners who saved up equity consider mortgage refinance loans. Many homeowners typically look toward a debt consolidation or home equity loan to roll their credit card debt or to get additional cash out. Current second mortgage guidelines do not lend to the needs of most borrowers because most do not have enough equity in their home. Credit score requirements have also been raised for equity loans, so many homeowners have been turning back to refinance loans to accomplish debt consolidation or to finance home improvements. FHA loan options remain the most popular mortgage this year.
Mortgage rates remain favorable for home refinancing. Today’s home refinance loan terms are as follows: 30-year fixed at 4.625 % with no points or a 15-year at 4.125 % with no points or fees.
Credit Problems Hindering Mortgage Refinancing
Posted by: | CommentsThe mortgage refinance application volume dropped significantly last week. It appears the pool of eligible borrowers for home refinancing has been shrinking significantly as mortgage lenders continue to tighten their loan guidelines leaving no solutions for borrowers with bad credit . According to a report from CNBC, many insiders were surprised by MBA’s report this morning on weekly home refinancing applications report from the Mortgage Bankers Association.
Even as the 30-year fixed mortgage rates are available at 4.75%, refinancing fell dramatically last week for the first time in a month, down 14.25%. Michael Fratantoni writes, “Despite the historically low mortgage rates, many homeowners have already refinanced recently, remain underwater on their mortgages, have uncertain job situations, or have damaged credit following this downturn, and therefore may not qualify to refinance.” Fratantoni underscores the problem most borrowers have with the lack of home equity being the driving force for not qualifying to refinance. For homeowners who have good credit but owe more on their mortgage than their home is worth, they may be eligible to refinance under the government’s Home Affordable Refinance Program. This refinance loan allows conforming mortgages to be refinanced up to 125% loan to value.
The issue of bad credit refinancing is a biggest reason most borrowers can’t approved for a home refinance loan. If you were late on a mortgage payment, you won’t qualify for the FHA refinance program. That is why so many homeowners are seeking loan modification plans. Many homeowners also suffer from credit card debt that usually brings down the credit scores. The lack of refinancing while interest rates are at record lows underlines the major problems in mortgage lending in 2010. It also suggests that the government involvement in the housing crisis may have its repercussions.
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