The most popular of all mortgages for both purchasing and refinancing is the 30 year mortgage. Often, when borrowers are refinancing, they are only looking for a lower monthly mortgage payment which makes choosing a 30 year mortgage the most feasible option. The downside of this refinancing move is that after a borrower has already paid the mortgage for several years, this 30 year choice adds years back to the mortgage. Basically, the years of monthly paying are wiped out and the borrower is actually starting all over. With a 30 year mortgage term, the first few years of mortgage payments are mostly interest payments. On the other hand, refinancing to a 15 year mortgage term can usually lead to an increase in the monthly mortgage payment. Since mortgage rates are currently so low, the actual difference depends on how high the original mortgage rate was. With 0.7 to 1% origination fee, 30 year fixed mortgage rates are at 3.500% and 15 year fixed mortgage rates are at 2.875%. It is possible that the proposed 15 year monthly mortgage payment may be the same or only slightly higher than the current mortgage payment. For borrowers who can manage the monthly payment, a 15 year mortgage is completed in half the time and the interest savings is huge. Since the principal amount of the loan is paid down at a faster pace, less overall interest is actually paid on the loan. At today’s mortgage rates, there is an approximate $45,000 savings in interest payments per $100,000 with a 15 year mortgage when compared to 30 years.

Choosing between 30 years and 15 years when refinancing is a big decision, but one worth investigating. Borrowers should request Good Faith Estimates for both mortgage terms in order to accurately weigh the difference in the monthly mortgage payment. Although a 15 year mortgage can be a major long term savings, it is not for everyone. Putting any additional strain on a household budget may not be worth the risk and, therefore, has to be an individual decision.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.

The most obvious reason to refinance now is to get a lower mortgage rate than the existing one. As mortgage rates moved lower over the past year, many people did not pay attention to this part of the news and may have missed out on a good opportunity. So there are still plenty of borrowers who have never refinanced, but can still do so now.

Another reason is for the stability that borrowers can get from refinancing an adjustable rate mortgage to a fixed rate mortgage. While this tends to be one of the major reasons for refinancing through the years, some borrowers will actually refinance an adjustable rate mortgage, which is coming due to readjust, to another adjustable rate mortgage just to extend the time. While mortgage rates are low, this is a good strategy that can benefit some borrowers provided they keep on top of mortgage rates and how they are changing prior to any readjustment.

For homeowners who have paid off their mortgage, cashing out their home value totally or partially by refinancing gives them the money they need to purchase a second home, start a business,etc. It is much easier to refinance an fully owned property that has no existing mortgage than to get a second home mortgage or a private loan.

If there is equity in a home, paying off high interest debt with a low mortgage rate cash out refinance is a good idea and is often used. Years ago people took out equity to purchase material items, while in current times, borrowers are obtaining cash out refinances for debt consolidation. Refinancing in order to eliminate an existing home equity loan is another plan. Combining the existing mortgage and equity loan into one refinanced mortgage makes more sense since the future rate of the equity loan may be unknown.

Sometimes, things need to be done regardless of mortgage rates. Since mortgage rates are so low, it is a good time to finish up those pending divorce settlements that require names to be removed from the mortgage and deed. The same is true for new marriages or domestic partnerships. Adding or removing names from deeds is costly when it is necessary to pay recording fees and tax stamps and often keeps individuals from pursuing this paperwork. By refinancing, not only will borrowers be saving with current low mortgage rates, but the title, deed and mortgage document name changes can be done at no additional cost.

Refinancing for any reason is always a good idea when mortgage rates are low. It is at these times that the transaction becomes beneficial to the borrower who can then take care of personal business while at the same time enjoy the substantial savings they have obtained.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.

Each entity has set forth guidelines for Harp 2.0 refinances. The main objective of these refinances must be to reduce the monthly mortgage payment. The major change with this program is that the use of appraisals has been eliminated in order to help underwater borrowers. This means they have done away with the maximum loan to value for both the 30 year and 15 year mortgage. Besides the obvious benefit, borrowers also save approximately $400 by not needing an appraisal. At least one borrower must have a source of income that must by verified. Borrowers with one 30 day delinquency within the past 12 months are acceptable provided the delinquency has not happened within the past 6 months.

Since the ultimate goal is to reduce the monthly mortgage payment, Fannie Mae has included a minimum credit score of 620 and maximum debt to income ratio of 45 percent when the new mortgage increases the principal and interest payment by more than 20%. In this instance, verification of income sources and assets to close, if necessary, are required. Borrowers who have had a bankruptcy or foreclosure do not have to meet the standard waiting period and re-establishment of credit for a Harp 2.0 refinance.

These changes with Harp 2.0 have been brought out at a time of historically low mortgage rates in order to get borrowers to refinance mainly underwater mortgages. Current 30 year fixed mortgage rates are at 3.750%, 15 year fixed mortgage rates are at 3.125% and 5/1 adjustable mortgage rates are at 2.500%, all with 0.7 to 1% origination fee. Guidelines have been designed in a way to be beneficial to lenders so that they will be more willing to offer and approve these mortgages for borrowers who have been searching for a rescue. This is the program everyone has been waiting for as refinancing now takes a new turn with Harp 2.0 which will finally help borrowers stay in their homes at a lower cost.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee

Most borrowers have turned to FHA for their refinancing needs due to FHA’s acceptance of lower credit scores. To make the transaction even sweeter, FHA 30 year fixed mortgage rates have been consistently lower than conforming 30 year fixed mortgage rates. Having an overwhelming amount of business, FHA mortgage loans have undergone several changes over the past year in order to protect themselves financially. The most recent change is effective April 18^th when FHA mortgages will have higher annual mortgage insurance premiums. These premiums are paid monthly over the course of the year as part of each mortgage payment. The latest FHA MIP increase is .25% on the loan amount. Although this is a small increase, borrowers can still beat the deadline by getting in their mortgage refinance application now.

Changes are also taking place with conforming mortgage loans issued through Fannie Mae and Freddie Mac. Both government entities have already increased their risk fees for mortgage loans even to borrowers with high credit scores. There is a whole lot talk about other major changes coming down the line for Fannie Mae and Freddie Mac that could have a major impact on the entire mortgage industry. For these reasons alone, homeowners should be watching carefully if they are considering a conforming mortgage refinance. Current conforming mortgage rates are still low enough to be beneficial to borrowers who are looking to save money.

Many homeowners may be underwater in their current mortgages and feel that it is impossible to refinance at this time. This has been a major issue keeping homeowners away from inquiring about a refinance. With tax season here and tax refunds coming in, some homeowners are taking the step to refinance and are bringing cash to the table in order to benefit from the current low mortgage rates. No one knows how long these low mortgage rates will be around for the taking as unemployment decreases, jobs increase and the overall economy slowly recovers.

All homeowners have different needs when it comes for reasons to refinance. It could be to get rid of higher mortgage rates, higher monthly mortgage payments, switching from an adjustable rate mortgage or simply a reduction in the length of the mortgage. The intention of each need is always the same and that is to save money. Diligent homeowners who are aware and watching the changes take place in the mortgage and real estate industry, are stepping off the fence and finding that now is the time to refinance their mortgage before it is too late.

This video talks about all this and more. Click to play.

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Mortgage refinance may be all but dead. The mortgage refi boom has been put on life support by the Fed who drove interest rates down to all time lows by purchasing mortgage backed securities. When mortgage rates go up where does that leave us? It’s a question worth asking as we approach the end of the Treasuries MBS purchase program.  As mortgage rates rise the last of the pool of people who can benefit and qualify for a refinance will drop to near zero. Refinancing will be dead.  Equity in homes is gaining, if at all at a snails pace. When homes aren’t gaining value, the equity just isn’t there to refinance out of a second mortgage, a mortgage with PMI, and adjustable rate you took to get into a home, whatever the case may be. There’s really not going to be that cash to take out to put in that swimming pool or redo the kitchen cabinets. Unfortunately, until homes start gaining in value the refinance business, especially when mortgage rates rise, will die off.

Current Mortgage Refinance Rates

Current mortgage refinance rates are up from all time record lows documented just 3 weeks ago. Still mortgage refinance rates are near the all time lows and are historically low. Yesterday we saw a slight improvement in mortgage refinance rates as the 30 year fixed refi rate moved from 4.875% down to 4.75%. 15 year fixed mortgage refinance rates are as low as 4.25%. 5/1 ARM refi rates are as low as 3.75%.

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One of the first things banks look at after determining you’ve got the equity to refinance is your income. Many have lost their jobs disqualifying them for a mortgage refinance. Many people used to get stated income loans with no income documentation required. Stated income loans which were used mostly the self employed who did not pay their full taxes which is more people than you may think, are no longer available. Matter of fact they’ve been made illegal in many states including Minnesota. Some can’t refinance because new guidelines for condo’s have made it nearly impossible to refinance a condo. Others can’t refinance at a 30 year fixed rate of 4.75% because they’ve got a jumbo mortgage above Fannie and Freddie limits. Where’s a World Savings no income no asset jumbo mortgage when you need it? World Savings is out of business (folded and disappeared into Wachovia). Ditech is doing jumbo loans, but forget 4.5% 30 years fixed. Try out a 5.875%, that’s not what I saw on a freeway billboard. A final reason I’ll mention, people used to bu ya home with little to money down, watch it increase in value by 20% in 1 or 2 years and refinance. That’s just not happening anymore, anywhere.

For all these reasons and more mortgage refinancing isn’t what you’d think despite today’s mortgage rates being at all time lows. When mortgage rates eventually do rise, to the 5′s, and then into the 6′s refinancing will be dead.

The Mortgage Banker’s Association said this week mortgage applications declined over 16 percent as 30 year fixed mortgage rates crept up closer to 5 percent at par. Mortgage refinancing is down significantly in quarter 3 of this year as the extended period of low interest rates has allowed most who qualify to refinance by now. Mortgage purchase applications have steadily increased throughout the year.

Mortgage Refinance Rates

FreeRateUpdate.com research of wholesale mortgage lender’s refinance rates shows after a 1/4 percent increase mortgage refinance rates have held steady for over 2 weeks. 30 year fixed refinance rates are at 4.875 percent at par. 15 year fixed refinance rates are at 4.375 percent at par. 5/1 ARM refinance rates are as low as 3.75 percent at par. Par rates are the lowest available interest rates without the requirement of additional points and fees to be paid by the borrower, also known as a buy down. The 7 year treasury auction, which followed 2 and 5 year treasury auctions earlier in the week which were met by strong investor demand, fielded relatively weak results not helping to lower mortgage rates Thursday. Friday was a great day for mortgage rates as rising RMBS prices drove lender’s to reprice favorably stabalizing 30 year fixed mortgage rates under 5 percent. The 10 year treasury yield, a leading indicator for 30-year fixed-rates finished the week at 3.39.

Mortgage Refinance Rates Last Week

Freddie Mac reported conforming 30 year fixed mortgage rates averaged 5.07 percent Monday through Wednesday of last week. A mortgage refinance at a loan amount of $200,000 fixed for 30 years at 5.07 percent is $1,082.22 principal and interest. Our research of wholesale lender’s mortgage refinance rates throughout last week showed as low as 4.875 percent available, with normal points and fees, for the entire week. Borrowing costs were least expensive Friday mid day when mortgage refinance rates neared 4.75 percent fixed for 30 years.

Mortgage Refinance Applications Up

Mortgage refinance applications sky rocketed up 23 percent last week according to the Mortgage Banker’s Association. The increase in mortgage refinance applications is credited to lower mortgage refinance rates.

Despite the higher volume of mortgage refinance applicants mortgage refinance has been hampered by declining home values, an inefficient but newly required appraisal procedure, lower average American credit scores, unemployment, and of course strict underwriting guidelines.