All posts in Refinance

The New HARP Refinance Program

by Justin Miller on November 18, 2011 in Refinance with No comments

May refer to this program as the Obama Refinance but it’s called the HARP loan, Home Affordable Refinance Program.  It was originally meant to help those who were underwater up to a loan to value of 125% if you had a Fannie Mae or Freddie Mac loan.  Now they are looking to expand the program to have no cap on the loan to value and to make the interest rates more competitive when the loan to value is over 95% because right now the rates are very high. 

It doesn’t seem we will know much until after December 1st, 2011 and then after that once the banks implement it.  I am not quite sure how it is going to work since they are saying loans with loan to values over 125% cannot be sold to Fannie or Freddie until March 2012.  The program continues to be available only to borrowers whose loans that are from on or before May 31, 2009.  This could potentionally benefit a lot of people in Fort Lauderdale & South Florida. 

The announcements from Fannie Mae, Freddie Mac, and FHFA may be accessed online:

The Updated Home Refinance Program

by Justin Miller on October 24, 2011 in Refinance with No comments

Although the Federal Housing Finance Agency, with Fannie Mae and Freddie Mac (the Enterprises), announced changes today to the Home Affordable Refinance Program (HARP) it hasn’t yet been implemented.  Many refer to this as “The Obama Refinance Program.”

The guidelines for this program, including implementation dates and details, will be available on November 15, 2011.  Just because they will be available on November 15th does not meet the banks will implement it right away and they rarely ever do because they will institute their own set of guidelines.

This loan will only be available if you have a Fannie Mae or Freddie Mac loan.  Some of the changes include:

  • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
  • Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
  • Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
  • Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
  • Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

You can read the FHFA New Release and as more information comes available I will be sure to share it with you.

No Closing Cost Refinance

by Justin Miller on September 8, 2011 in Interest Rates, Refinance with No comments

The saying is that if it sounds too good to be true then it must be.  So what’s the catch with a no cost refinance for your Fort Lauderdale and South Florida home?  You will get a higher interest rate than those who pay their own closing costs or roll it into their loan.  It is a great option right now and one you should consider.  This is not for everyone and you need to look at the pros and cons.

The good thing about the no closing cost refinance is that if rates drop further you can refinance again without a cost.  The downside is if interest rates never go lower you won’t have the lowest rates available.   Can rates go lower?  Anything can happen but the odds are not in our favor but that is just my opinion. 

Everyone’s circumstances are different so make sure to consider all options and discuss them with your mortgage professional.  What’s best for your neighbor, co-worker, family member, etc. isn’t always best for you.

No Closing Cost Mortgages For Your Fort Lauderdale Mortgage

by Justin Miller on July 26, 2011 in Interest Rates, Refinance with No comments

Nothing is free in life and the same is to be said with a no closing cost mortgage.  The way a no closing cost mortgage works is that you will get a higher interest rate than what the market rate is with a credit back from your lender to go towards closing costs. 

A no closing cost refinance or purchase is good for someone who isn’t going to hold onto their mortgage for a long enough time period in order to recover the costs involved.  Make sure to compare the difference in payment to a loan with a lower interest rate and paying closing costs. 

Also, make sure that you aren’t getting a higher interest rate because someone is charging too many fees.  You always want to review the total fees no matter who is paying them because in the end you will end up paying for it.

A Bonus For Paying Your Mortgage?

by Justin Miller on July 12, 2011 in Bailout, Loan Modification, Refinance, Short Sales with No comments

That’s what some borrowers are getting that have negative equity in their home.  Here is what the article from CNBC had to say:

It’s called Responsible Homeowner Reward, and today, one of the nation’s largest mortgage insurers, PMI Mortgage Insurance, joined in.

Here’s how it works. Borrowers pay nothing. They sign up with the program, promising to keep current on their mortgages for a certain period, generally 36 to 60 months (LVG has worked out the contract with the participating lender/investor. 

After that period, the borrower will be paid anywhere from 10 to 30 percent of the loan principal, depending on the contract, in cash. The lenders/investors pay LVG, which receives a servicing fee, and LVG pays the borrowers. Again, the borrowers pay nothing for this bonus.

http://www.cnbc.com/id/43713068?__source=RSS*blog*&par=RSS

When Is A Good Time To Refinance Your Fort Lauderdale Mortgage?

by Justin Miller on June 22, 2011 in Refinance with No comments

We always hear the saying that if you can’t lower your rate by 1% it isn’t worth refinancing.  That is not true.  It is a good barometer to use when thinking about refinancing but for some people it could be less than 1% or more than 1%.  

Interest rates have come down some of late so it might not be a bad idea to look at the possibility of it depending on your current interest rate.  There are no closing cost refinance options so if you are at say 6% but only plan on staying in your home for another year or 2 you could still lower the interest rate without taking on additional costs.

Should You Get An Adjustable or Fixed Rate Mortgage?

by Justin Miller on February 17, 2011 in Conventional Loans, FHA Loans, Interest Rates, Mortgage Education 101, Refinance with No comments

It’s a tough call especially now when interest rates have been in the rise and the spread between fixed rate and adjustable rate mortgages is at an all time high.  Even though rates have risen they are still at historical lows.  We have all gotten spoiled because they were in the low 4%’s and high 3%’s at one time.

Let’s do some comparing.  We will use a purchase price of $200,000 with 20% down which will leave us with a loan amount of $160,000 all paying no points.  Keep in mind most rates that you find online are with paying a 1% or more loan origination fee which is 1% of your loan amount so in this example it would be an extra $1600.  Make sure you are always comparing apples to apples.

The payment on a 30 year fixed at 5.125% would be $871.18, on a 7 year adjustable at 4.5% it would be $810.70, and on a 5 year adjustable it would be $752.38.  That can add up to a lot of money saved if, and it’s a big if, you decide to sell.

I think a 5 year adjustable is a very short period of time and should only be used for a very select few.  There is no rule of thumb for everyone.  Remember, with adjustable rate mortgages there are caps that prevent the rate from going up past a certain point each adjustment period.  Make sure you know what your margin is, the initial rate adjustable cap, and the ceiling on the rate.  Always talk to a mortgage expert. 

Below is a great article from MarketWatch on this topic too:

http://www.marketwatch.com/story/adjustable-versus-fixed-rate-mortgages-2011-02-16?siteid=rss&rss=1     

The Fed & Interest Rates

by Justin Miller on November 9, 2010 in Conventional Loans, FHA Loans, Interest Rates, Jumbo Mortgages, Refinance with No comments

Many are wondering where interest rates are at now that the mid-term elections are over and the Fed announced their Quantative Easing II (QE2) which entails additional purchases of bonds.  Well, rates are still at historic lows and it has certainly created a lot of volatility.

The day the Fed met mortgage bonds which move interest rates got worse because the amount of bond purchases per month was at $75 million per month versus the expectations of $100 million per month.  The following day the bond markets rallied and then we had the Friday unemployment report which was better than expecations and bonds got worse. 

In English, interest rates are still the same prior to the announcement of the Fed’s bond purchase program.  When mortgage bonds get about 25 basis points (.25) worse banks will look to reprice interest rates for the worse.  Just because they do a reprice for the worse doesn’t necessarily result in a higher interest rate.  It may just be less pay for the mortgage professional. 

The same can be said for when bonds get 25 basis points better, it may not result in a better interest rate.  Lots of times it will take a 50 basis point movement but there is no exact science to figuring this out.  The bigger problem is when bonds improve and you think rates will improve and they don’t.  The reason is banks may not pass the savings on because they get overloaded with volume.  How do you reduce your volume to you can still provide a service, make rates higher so you don’t get new loans for a day or so. 

The bottom line is that you should lock your  interest rate in when you are happy with your payment and never looks back.  It’s better to be locked wishing you were floating then to be floating wishing you were locked.

When Should You Refinance & Lock In An Interest Rate

by Justin Miller on October 16, 2010 in Interest Rates, Refinance with No comments

I think Ed Conarchy of Cherry Creek Mortgage said it best, “it’s better to be locked in and wishing you were floating then to be floating wishing you were locked.” Interest rates are at historic lows and lower than I ever thought they would go. If you have been thinking about refinancing your mortgage now is the time.

It is a great time right now to lock in a rate. Even if the Federal Reserve announces at their next November 3rd meeting that they are going to buy more mortgage-backed securities and rates do drop you can try to renegotiate your interest rate. You won’t get the current market interest rates but if they drop low enough you will get close to it and you took out the risk by locking in earlier and putting a ceiling on your interest rate. To find out more on how the renegotiation policies work you will have to speak with your Mortgage Professional because every bank is different and every loan is different.

I don’t know about you but I don’t make financial decisions based on what our government might do. Part of their “Quantitative Easing 2″ (QE2) which is to buy more bonds is already partly built into these incredibly low interest rates so if they do announce they are doing this and it’s not as big as some had thought rates could rise. You just never know.

Anyway, don’t be greedy and miss out on these low rates. Rates can go lower but they can also go higher. If they go lower and you already refinanced you can refinance again but if they go higher and you didn’t refinance you just missed out. No one can predict the future. All we know is at the present time rates are extremely low.

No Closing Cost Mortgages

by Justin Miller on October 6, 2010 in Conventional Loans, FHA Loans, Jumbo Mortgages, Refinance with No comments

The saying goes “if it’s too good to be true it probably is.”  A no closing cost mortgage is no different, you pay one way or the other. 

The way a no closing cost loan works is you end up getting a higher rate so that the closing costs can be paid through the premium with a higher interest rate.  An example is if market rates are at 4.25% paying no points a no closing cost mortgage might be at 4.75%.  You have to determine what is best for you depending on what your plans are for the future. 

If you need the no closing cost option because you are short on the monies needing to close than you might want to rethink purchasing a home.  There are more costs that come with owning a home than renting. 

It can be a tough call in this current market to decide because part of me says that rates are at historic lows so you want to lock in the lowest possible rate since you need to go into it knowing you need to hold onto the property for 10 years.  The other side of it is just when we think interest rates can’t go lower they do and if you did a no closing cost loan to begin with you would be able to refinance to a lower rate either paying closing cost only once or doing another no closing cost loan hoping they fall again. 

There are talks that the Fed will announce on November 3rd their plan to buy more mortgage-backed securities which in turn would make rates move lower temporarily.  I don’t think betting on anything the government is going to do is a smart decision.  I am not critizing our government or any specific party here it’s just I don’t recommend making your investment decisions based entirely on what they may or may not do. 

The safe bet is probably to pay the closing costs but each and every loan is different depending on their future and goals.  Always consult a Mortgage Professional first before deciding.

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