Mortgage applications jumped last week as historically low mortgage rates fueled a pick-up in refinancing. Overall, applications were up 6.9 percent for the week ending April 13, as refinancing increased 13.5 percent, the Mortgage Bankers Association (MBA) reported Wednesday. Meanwhile, the purchase index decreased 11.2 percent from a week earlier and was 13.9 percent lower than the same week last year. The four-week moving average, a less volatile measure, is up 1.6 percent overall, while refinancing increased 2.36 percent and purchases were down 0.52 percent. The refinance share of mortgage activity increased to 75.2 percent of total applications from 70.5 the previous week.
Update to the HARP Refinance Program a Boon for Homeowners
April 17, 2012 By
By now, I am sure many of you have heard about the Home Affordability Refinance Program (HARP 2.0). Designed by Fannie Mae and Freddie Mac, this program was created to help homeowners stay in their homes by making their monthly payment more affordable. This is essentially an opportunity to refinance and lower your current interest rate no matter how much you owe on your home. First introduced in 2009, the intent of HARP was to help millions of Americans take advantage of the low interest rates and, in the meantime, stabilize the housing market. This original program was capped at 125 percent current loan to value and was really only able to help a select few. Many homeowners who saw their home values drop below this mark were excluded. The original HARP was considered by many as somewhat of a failure. Now enter HARP 2.0. Under the updated HARP guidelines, there is no longer a loan to value restriction on owner occupied properties. This means that those that those that were excluded under the original HARP program can actually take advantage of the HARP 2.0 to lower their interest rate regardless of value.
Should I Do a Cash-Out Refinance to Invest?
April 12, 2012 By
I’m turning 50 this year and currently am 18 months into a 15-year fixed-rate mortgage. Although I have an attractive interest rate of 3.625%, in today’s environment I can refinance, take about $25,000 cash out and maintain the same payment. I could use the cash toward catching up on my 401(k), individual retirement accounts, then other expenses and investment as required. This seems to be a cheap way to do this, so the cash-out refinance seems a no-brainer that would add only about 18 months to my original mortgage. Thoughts? Bankrate’s national average for a 15-year fixed-rate loan is 3.48%. For you to have the same payment on a new cash-out refinance and new 15-year fixed-rate mortgage, the interest rate would have to be around 2.625%, or a full percentage point lower than your existing loan.
What Influences Your Refinance Rate?
April 11, 2012 By
Rock-bottom mortgage rates entice homeowners to refinance, but many borrowers are surprised to find that the advertised mortgage rate is not necessarily the refinance rate they will be offered. In fact, mortgage rates for a refi on any given day can vary by as much as a full percentage point or more, depending on various factors. “A mortgage rate sheet looks like a menu, and there’s a grid of available rates we see each day,” says Peter Boyle, a senior loan originator with Summit Mortgage Corp. in Plymouth, Minn. “There are lots of things that influence an individual’s mortgage (refinance) rate, including whether or not they pay points.”
Mortgage Applications on the Rise
April 4, 2012 By
The number of mortgage applications filed in the U.S. last week rose 4.8% from the prior week, the Mortgage Bankers Association said Wednesday, as refinancings picked up following six straight weeks of declines. Refinance activity climbed 4%, according to the MBA’s weekly survey, which covers more than three-quarters of all U.S. retail residential mortgage applications, while purchasing increased by a seasonally adjusted 7.2% during the week ended Friday. The latest uptick in applications halts a seven-week slide reported by the MBA. Interest rates had been climbing earlier in the year, likely keeping some homeowners on the sidelines of the mortgage market, but rates declined across the board in the most recent week.
What is HARP?
April 3, 2012 By
Announced in March 2009, HARP is a federal government program designed to help 5 million underwater or near-underwater homeowners refinance into a fixed loan with a lower monthly payment. However, as of Aug. 31, only 894,000 borrowers have refinanced through HARP. On Oct. 24, 2011, President Obama announced an overhaul to the HARP program with the intent of reaching more underwater homeowners. The expanded HARP program – also referred to as HARP 2.0 – will take effect on December 1, 2011 for borrowers with a loan-to-value ratio of less than 125 percent and in the first quarter of 2012 for borrowers with a loan-to-value ratio of greater than 125 percent.
THE MONEY STORE Introduces HARP 2.0 Refinancing
April 3, 2012 By
About four million Fannie Mae and Freddie Mac borrowers nationwide owe more on their mortgages than their homes are worth. Today, THE MONEY STORE(R), a national lender with rates that are among the lowest in the country, announced that it is offering refinancing through HARP (Home Affordable Refinance Program) 2.0 on loans owned by Fannie Mae. Now, homeowners can refinance their homes, and get their mortgages with lower interest rates and quicker turnaround times than with banks. On March 17, HARP 2.0 went into effect for Fannie Mae and Freddie Mac borrowers.
HARP Competitive Refinance Rates
April 3, 2012 By
As the HARP 2.0 program continues to gain attention nationwide, Mike “Mr. HARP” Chiu’s low rates and closing costs are giving homeowners much needed relief in this troubled economy. There’s a certain air of confidence to Mike Chiu. His candidness regarding refinancing, whether it be in general or specifically through the Home Affordable Refinance Program (HARP), would have some people thinking it’s all for show. You won’t hear his clients complain about it though.
Obama’s HARP Is Music to Bankers’ Ears
March 30, 2012 By
Nomura analyst Brian Foran expects the latest version of the government’s Home Affordable Refinance Program — dubbed HARP 2.0 — to offer a major revenue tailwind to banks in the mortgage origination business , much bigger than the market is currently anticipating. Refinancing volume is likely to rise with HARP now accounting for 20% to 40% of bank applications. Banks also stand to benefit from gain on sale of HARP loans, which command a stronger premium in the market. In all, HARP could offer as much as $12 billion in mortgage banking revenue upside to the industry, according to Nomura, offsetting the negative impact of lower interest rates on interest income.
No-Cost Refinancing Myth
March 29, 2012 By
There is no such thing as “no-cost refinancing.” There is only “full cost” refinancing disguised by marketing code as “no-out-of-pocket-cost-refinancing.” There are always costs involved when you refinance your mortgage. If an appraisal is required, the appraiser needs to get paid. Credit gathering agencies charge a fee to your lender for your credit report, and then there are lender fees, government recording fees, a title search, title insurance, and someone has to be paid to do the closing… you get the picture.
