Archive for FHA Refinance
FHA Mortgage Refinance Applications Jump
Posted by: | CommentsThe Mortgage Bankers Association released their Weekly Mortgage Rate Report that indicated that FHA mortgage refinance applications rose again last week. This came as a surprise to many brokers and loan officers who anticipated a slower influx of internet mortgage leads because the previous week saw a significant jump in refinance applications.
Jerry Mlinar,a senior mortgage consultant for Woodfield Planning Corporation said, “The rate of applications for FHA refinancing has risen dramatically over the last few weeks and we have attributed it to simple supply and demand. Millions of homeowners are burdened by an adjustable interest mortgage and so naturally they want to reap the rewards of record low fixed rates.”
FHA mortgage refinance rates averaged 4.875% on fixed 30-year terms last week. Even though FHA home loans are more forgiving with equity and credit requirements, many borrowers are still challenged because FHA requires income documentation with all of their refinancing products. Many borrowers have grown accustomed to “stated income” loan programs and that explains why so many applications are turned down.
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.
Rates Drop and Mortgage Refinancing Applications Soar Again
Posted by: | CommentsIt seems that Europe’s financial crisis is converting to low mortgage rates for US borrowers looking to refinance their first or second mortgage. Homeowners seeking a low rate mortgage refinancing are in the right place at the right time if they have the credit, income and equity in their home to qualify: Mortgage rates are inching closer to a record low. The window of opportunity may close soon. Refinance rates could jump if investors grow more confident and shift money out of the safety of government bonds, which influence mortgage interest rates. For now, though, mortgage refinance rates are ridiculously low. The average thirty-year fixed-rate loan sank to 4.78% last week, the lowest this year and barely above the record of 4.71% set in December. And fifteen-year loans are at their lowest rates in twenty years.
According to the Mortgage Bankers Association, mortgage refinance applications soared last week to the highest level in seven months. Anxiety over the European crisis has caused global investors to snap up Treasury bonds, which they view as much safer than other investments. Treasury yields have fallen as a result, taking mortgage refinance rates down, too. When the crisis eases, and especially if the American economy recovery stays on track, expect investors to move out of bonds and back into stocks. That would make refinance mortgages more expensive. “If the economy finally really shows sustained improvement, rates are definitely going to go up,” said Fred Chamberlin, a consultant with Alpine Mortgage Planning in Eugene, Ore. He suggests that homeowners looking to refinance move fast and not hold out for even lower rates. “If you want the bottom, the only way you’re going to know it is when you’ve missed it,” Chamberlin said.
Home refinancing isn’t right for everyone who qualifies. In most cases, mortgage refinance loans cost several thousand dollars in fees. No cost mortgage refinancing may be available but usually the interest rates are higher, so in the end you may not save as much money as you would have you paid the lending closing costs. Experienced mortgage lenders recommend calculating how long it will take to recover those fees with the lower loan rate. As cheap as mortgages are these days, the number of loans being taken out to buy homes remains at its lowest point in more than 13 years. One reason is that a special tax credit for homebuyers expired last month. Many people had rushed to sign contracts by then. Another problem millions of homeowners are having is qualifying for a refinance mortgage. Borrowers need solid credit and a down payment of at least 3.5%.
Banks tightened mortgage refinance guidelines after millions of borrowers fell into default and foreclosure during the housing bust. A loan officer with Icon Mortgage in Las Vegas said, “They’re really looking with a magnifying glass,” said Steve Mevorah,. “They’re trying to make sure that they are flawless loans.” Analysts had expected mortgage rates to rise when the government ended a program designed to bolster the housing market. Instead, they fell because of fears that Greece would default on its debt.
Comparing Conventional Refinance Loans to FHA Refinancing
Posted by: | CommentsOne of the most common questions we get at Mortgage Refinancing Buzz is “What is the difference between conventional home refinancing and FHA refinance loans?” Both types of mortgage refinance loans are useful loan product and each program offers unique refinancing benefits for specific situations. Let’s compare the both loans and see if we can find out which refinance mortgage best suits your needs. Both conventional and FHA loan requirements have changed significantly in 2010, so discuss your eligibility with an experienced loan officer before making refinancing decisions online.
A conventional refinance loan is a traditional mortgage used to refinance an existing mortgage that stays within the conforming loan limits of $417,000. In most cases, this loan product ensures the lowest possible mortgage refinance rates. Conventional refinancing guidelines allow borrowers to take cash out up to 80% and usually the cash out will cost the borrower .25 of a point in closing costs. So on a $100,000 mortgage, a borrower would pay the lender $250 for the cash out feature. At the time this article is being published, conventional refinance loans are being reported at 4.625% fixed on thirty-year mortgage paying 1% point in origination fees. There is no cost for private mortgage insurance for loans that do not exceed 80% loan to value.
FHA refinance loans are similar to the conventional mortgages, but there are a few differences. First of all, FHA home loans require mortgage insurance. The only time is doesn’t is when a borrower takes out a 15-year FHA loan below 90% with no cash out. Cash out refinancing with FHA is allowed up to 85%. This is 5% more than the conventional loan offers, so if a borrower needs more cash out, then the FHA refinance is the loan of choice. If a borrower has some credit issues in the past, then FHA refinancing is likely the best choice because FHA guidelines are typically more forgiving when it comes to credit issues. Another advantage FHA refinance loan has is that the loans are assumable. That means if you sell the house, the buyer could theoretically assume your loan. When mortgage rates start to go up, the assumable feature good be a significant benefit, because the new borrower would get the fixed rate that original borrower locked into. Another feature borrowers like with FHA loans is that there is no pre-payment penalty. Whereas with some conventional loans the borrowers have pre-pay penalties. The most popular feature of FHA refinancing has to be the streamline option. When a borrower has a FHA mortgage and they seek refinancing with no cash back, the FHA streamline allows the borrower to get a low rate refinance with reduced closing costs. FHA streamline refinancing allows FHA customers to refinance anytime the market rate drops into a position that would save them money. During uncertain times the FHA refinance offers protection that if the rates drop, the FHA borrower can reap the benefits.
FHA Mortgage Loan Defaults Rise
Posted by: | CommentsFHA refinance loans remain more flexible than conforming loans, but if the borrower defaults, the FHA insurance held by our government picks up the tab. In a recent CBS article they profiled a New York City bus driver Steven Mitchell is two months behind on mortgage payments for a home loan guaranteed by Uncle Sam and part of a growing first-time home owner population at risk of foreclosure. His home in the Far Rockaway section of Queens, New York, has a mortgage insured by the Federal Housing Administration, known as the FHA, which does not grant home mortgages, but insures them.
FHA mortgage volume has soared – quadrupling in the past three years. In 2006, 425,000 borrowers acquired FHA home loans. This year, nearly half of all first-time home buyers in the U.S., a total of 1.8 million, used FHA-insured financing to refinance or make a new purchase.
Part of the appeal is the FHA allows a down payment as low as 3.5 percent of the purchase price. “The current degree of FHA predominance in the market is unparalleled,” Department of Housing and Urban Development Inspector General Kenneth Donahue told Congress earlier this year. FHA is part of HUD.
Mitchell has a monthly payment of $3,200, hefty for a bus driver earning $47,000 a year, but his brother and a friend who live with them were helping with the payments until they lost their jobs, leaving Mitchell juggling the household bills by himself. “As long as everything was still being paid, everybody was doing a part, it could have been done,” Mitchell said. Mitchell’s home is one of 5.5 million purchases or mortgage refinance loans worth a total of $696 billion currently insured by the FHA.
FHA forecasts it may pay out $27 billion over the next 30 years to cover expected defaults, leaving it with only $4 billion of its $31 billion cash on hand. That would sink the FHA’s capital reserves below the congressionally-mandated two-percent of its loan portfolio, but the agency says no bailout is in the offing. Read the complete > FHA article.
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