Take advantage of extraordinarily low rates before the refinance fee goes into effect later this year.
According to mortgage data firm Black Knight.
By refinancing to a mortgage with a lower interest rate, you could pay significantly less each month and over the life of the loan.
Today’s market rates are more than 44% lower than in 20081 and hovering around record all-time lows. However these rates are unsustainable and will likely be raised soon.
By switching from a 30-year to a 15-year loan, you could build equity faster and own your home outright in half the time.
Rates on 30-year fixed-rate mortgages dropped recently to an all-time low of 2.17%, according to mortgage giant mortgage.net. That's below the all-time low of 2.98%, reached in mid-July.
The current ultra-low rates give 17.8 million homeowners an incentive to refinance their higher-rate home loans and cut their monthly mortgage payments by an average $309.
Altogether, those mortgage holders could slash their interest costs by $5.1 billion a month, which Black Knight calls "a significant amount of potential economic stimulus" amid the COVID-19 recession.
You're considered a good candidate for a refinancing if you can shave at least three-quarters of a point — 0.75 — off your current 30-year mortgage rate. That means, for example, refinancing from a mortgage at 3.90% to a loan with a rate of 3.15% or better.
Rates Hit All Time Lows of 2.17% as of January 20, 20211. Take Advantage Today.
If you qualify to refinance your mortgage, you’ll go through an application, approval and closing process (similar to when you got your original mortgage). A lender will work with you through every step, and will help determine if programs meet your specific needs. Outlined below are the steps to get started.
Start by filling out the following questionnaire to see your estimated savings using this Free Online Tool.
Make sure you have your basic financial and loan information on hand when you call your mortgage company. It helps to have your mortgage statements, including information on a second mortgage (if applicable) & your income details (paystub or income tax return).
Get matched to lenders who work with Enhanced Relief Refinance Program. Tell them you are interested in refinancing, and you want to see what programs you qualify for.
If your lender determines that you do qualify, they will guide you through the application, approval and closing process.
The Historically Low Rates Mortgage provides opportunities to borrowers with existing mortgages who are making timely payments, but are unable to take advantage of the standard "no cash-out" refinance offering because the new mortgage exceeds maximum loan-to-value (LTV) limits.
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Available rates and terms (including APRs) are subject to change daily without notice. If you connect to a lender through the HARP Replacement service provider, they will be able to quote you rate & APR options, as well as any associate fees or rebates you're eligible for. fmerrprogram.org is not a lender, and therefore cannot guarantee rates.
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**"The current ultra-low rates give 17.8 million homeowners an incentive to refinance their higher-rate home loans and cut their monthly mortgage payments by an average $287, Black Knight said." - MSN: https://www.msn.com/en-us/money/realestate/millions-miss-out-on-mortgage-savings-of-dollar287-a-month-study/ar-BB17wgxy
1 Mortgage rates at the time of writing (January 20, 2021) are 2.56% (source: https://bankrate.com) are 44% lower than rates in 2008 as listed in http://www.freddiemac.com/pmms/pmms30.html
Upon completion, mortgage lenders and / or other providers of financial services will contact you to discuss your specific situation. Their service is free, however lenders and other service providers may charge you for their services. Available rates and terms are subject to change daily without notice. Our website exists solely for educational purposes, however, we may be compensated if you take an action on our partner's website.
FHA's nationwide forward mortgage limit "floor" and "ceiling" for a one-unit property in Calendar Year 2021 are $314,827 and $726,525, respectively. https://www.hud.gov/program_offices/housing/sfh/lender/origination/mortgage_limits
A shorter term mortgage enables such borrowers to pay down the amount they owe much faster than a traditional 30-year mortgage. Furthermore, interest rates on shorter term mortgages usually are less than on thirty-year mortgages. More information can be found at https://www.quickenloans.com/mortgage-options/fixed-home-loans
Two new refinance programs replaced HARP (which expired December 31, 2018). The HARP replacement programs are called "High LTV Refinance Option" (Fannie Mae) and the "Enhanced Relief Refinance" or "ERR". http://www.freddiemac.com/singlefamily/enhanced_relief_refi.html
"To encourage borrowers to make the decision to rebuild equity in their homes, we are proposing that the legislation provide for the GSEs and FHA to cover the closing costs of borrowers who chose this option - a benefit averaging about $3,000 per homeowner. To be eligible, a participant in either program must agree to refinance into a loan with a no more than 20 year term with monthly payments roughly equal to those they make under their current loan. For those who agree to these terms, the lender will receive payment for all closing costs directly from the GSEs or the FHA, depending on the entity involved."
Adjustable Rate Mortgage:
The initial payment on a 30-year $200,000 5-year adjustable rate loan at 4.125% and 75.00% loan-to-value ratio (LTV) is $969.3 with 2.375 points due at closing. The annual percentage rate (APR) is 5.059%. After the initial 5 years, the principal and interest payment is $969.3. The fully indexed rate of 5.125% is in effect for the remaining 25 years and can change once every year for the remaining life of the loan. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Rate is variable and subject to change after 5 years.
15-Year Fixed-Rate Mortgage:
The payment on a $200,000 15-year fixed-rate loan at 5.125% and 75.00% loan-to-value ratio (LTV) is $1594.65 with 0 points due at closing. The annual percentage rate (APR) is 5.301%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Rates shown valid on publication date of 10/18/2018. Some state and county maximum loan amount restrictions may apply.
Based on the two scenarios above, a homeowner could save hundreds from switching from a 15-year fixed-rate loan (payment of $1,504.56) to an adjustable rate mortgage (payment of $969.30), resulting in a savings of $535.26.
30-Year Fixed-Rate Mortgage:
The payment on a $200,000 30-year fixed-rate loan at 5.625% (6.087% APR) with 0 points and an LTV of 97% is $1,241.32, which includes a mortgage insurance payment of $90.00. Taxes and homeowners insurance are not included. The actual payment will be greater. Rates shown valid on publication date of 11/07/18. Product available on fixed-rate conventional products only. No FHA, VA or jumbo products. Additional restrictions/conditions may apply.
To qualify for these loan programs, you must be at least 18 years of age with a valid U.S. residency. Guidelines may vary for self-employed individuals. Formal approval will be subject to satisfactory verification of income, assets, credit, property condition and value. Additional restrictions/conditions may apply.
The average homeowner with a mortgage has gained $12,400 of equity in their home this year available to draw and use, that homeowners are missing out on. Due to the new tax laws, not all uses of cash from HELOC's are tax deductible, which is a loss of a major benefit for consumers who are interested in tapping into that equity. Therefore, cash-out refinances may be more appealing to individuals interested in refinancing, because they maintain their tax deductible benefits that are not as available under HELOC.
Out of the 51.7 million homeowners with a mortgage in the United States, 43.6 million have tappable equity. This means that 84% may have available equity or cash that they can use in their homes.
12-Month Low Rates:https://www.apnews.com/f33a8bce81e145f5bef0e97c8e449bdb