Mortgage Rates Newsletter - Market Analysis

Provided courtesy of: http://www.mortgagenewsdaily.com/reports/mortgage_rates/archive

Lowest Rates in 8 Years, But All Kinds of Disclaimers
Thu, 27 Feb 2020 23:29:50 GMT - Mortgage rates hit the lowest levels in 8 years either today or yesterday, depending on the lender, just narrowly edging out the rates seen in early July 2016. There are multiple caveats, however. First off, lenders are responding to recent market movements in different ways. Some lenders move down faster and then remain flat even as the bond market (which dictates rates) improves. Other lenders have been slow to react, but have since moved down more steadily. Still others are somewhere between those extremes. Perhaps the most important thing to note about mortgage rates this week is that, while they are certainly at long-term lows, they are absolutely NOT moving lower as fast or as much as US Treasury yields. I discussed this in greater detail in the previous rate article and then again this
Important Lessons From Near-Record Low Mortgage Rates
Tue, 25 Feb 2020 01:24:08 GMT - Mortgage rates continue to carve out the unlikeliest of victories in 2020 with significant help from coronavirus. The epidemic has taken a year that was almost certain to start off with a steady move toward higher rates and turned it into one of the strongest starts on record. In fact, when it comes to the combination of ground covered and levels achieved, no other year has started off any better. Other years have seen a similarly big drop in rates during Jan/Feb, but there aren't many. Of those years, 2016 was the only one to remotely match the rates we're currently seeing. Unless tragedy strikes the mortgage world by the end of this week, 2020's late February rates will be roughly 0.25% lower than they were in 2016. But rates ultimately did move lower in 2016 after the Brexit vote in late
Mortgage Rates Back Near Multi-Year Lows
Thu, 20 Feb 2020 21:36:58 GMT - Mortgage rates haven't been this low for this long in years--3.5 years to be exact. Brexit was the talk of the town in the middle of 2016 and it resulted in rates very close to all-time lows for well over 3 months (all of July, Aug, Sept). Although rates aren't quite as low this time around, they average lender is still quoting 3.5% or lower on top tier scenarios. That's only happened on a consistent basis in 2016 and 2012. Moreover, the current stint is approaching a month in length. Combine that with the fact that rates haven't been over 3.875% since the middle of 2019, and the current mortgage environment is more than worthy of being viewed in the same legendary light as 2012 and 2016. In 2012 it was the European crisis and massive central bank bond buying. In 2016 it was Brexit and massive
Mortgage Rates Hangin' Tough Despite Stock Market Recovery
Fri, 14 Feb 2020 22:26:44 GMT - Mortgage rates have primarily been at the whim of the general tone of coronavirus news for the past few weeks. That meant a swift move to multi-year lows followed by an uneven correction back toward higher levels. But the correction has been anything but threatening, and it stands in stark contrast to a much sharper correction seen in the stock market (i.e. stocks quickly got over coronavirus fears and returned to all-time highs). Why are rates able to hang tough at levels that are still quite close to long-term lows while other parts of the market seem to have moved on? Although the US stock market has moved on to some extent, Asian equities markets have not. They are pricing in the global economic impact that will ultimately be seen due to coronavirus. Granted, that impact may not be huge
Mortgage Rates Still Giving Back Coronavirus Gains
Wed, 12 Feb 2020 22:12:22 GMT - Mortgage rates have spent just over a week moving back up from the lowest levels in more than three and a half years. Those long-term lows came courtesy of the panic surrounding the coronavirus outbreak, which led investors to move more money into safe havens like bonds. When demand for bonds rises, rates fall, including mortgage rates. The move back up coincides with a steady decrease in the level of panic surrounding the outbreak. Global stock markets have not been shy about reversing coronavirus-related losses, with US stocks actually back to all-time highs. Chinese equities haven't made up nearly as much ground by comparison. And finally, the bond market (which dictates interest rates) isn't anywhere close to its pre-coronavirus levels. All of that having been said, rates are still moving
HARP Loan

HARP Loan

When you have little equity in your home, or owe as much or more on your mortgage than your home is worth, it can be difficult to find a lender willing to help you refinance. But for borrowers who have remained current on their mortgages, and have loans owned by Fannie Mae or Freddie Mac, there is hope. It's called HARP. 

Introduced in March 2009, HARP enables borrowers with little or no equity to refinance into more affordable mortgages without new or additional mortgage insurance. HARP targets borrowers with loan-to-value (LTV) ratios equal to or greater than 80 percent and who have limited delinquencies over the 12 months prior to refinancing. 

Significant changes have been made to HARP since the program was first introduced. For example, in 2011 the LTV ceiling was removed, property appraisal requirements were waived in certain circumstances, certain risk fees for borrowers selecting shorter amortization terms were eliminated, and certain representations and warranties were waived. In 2013, the eligibility date was changed from the date the loan was acquired by Fannie Mae or Freddie Mac to the date on the note, increasing the pool of eligible borrowers. 

HARP has also been extended several times and will now expire on December 31, 2016. 

Through HARP, you can get a lower interest rate (which means less out-of-pocket costs each month), get a shorter loan term, or change from an adjustable to fixed-rate mortgage. There's no minimum credit score needed, either. 

And now that HARP guidelines are simpler, even people who were formerly turned down may now be eligible for HARP refinancing.  

How can HARP help me?

If you are current on your mortgage; have a mortgage that is owned by Fannie Mae or Freddie Mac, and owe as much or more than your home is currently worth, you may be eligible for HARP refinancing. That can mean significant savings by: 

  • Lowering your monthly payment
  • Reducing your interest rate
  • Securing a fixed-rate mortgage that won't change over time
  • Building equity faster—shorter term options may be available
  • Lower closing costs because an appraisal is not usually required

HARP program includes:

  • No underwater limits
    Borrowers will now be able to refinance regardless of how far their homes have fallen in value. Previous loan-to-value limits were set at 125 percent.
  • No appraisals or underwriting
    Most homeowners will not have to get an appraisal or have their loan underwritten, making their refinance process smoother and faster.
  • Modified fees
    Certain risk-based fees for borrowers who refinance into shorter-term loans have been reduced.
  • Less paperwork
    Lenders now need less paperwork for income verification, and have the option of qualifying a borrower by documenting that the borrower has at least 12 months of mortgage payments in reserve.
  • Program Deadline
    The end date to get a HARP refinance is December 31, 2016.

How do I know if I'm eligible for HARP? You may be eligible for HARP if you meet all the following criteria:

  • Your mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • Your mortgage must have been originated on or before May 31, 2009.
  • Your current loan-to-value (LTV) ratio must be greater than 80%.
  • You are current on your mortgage, with no 30-day+ late payments in the last six months and no more than one late payment in the past 12 months.

How do I find out if Freddie Mac or Fannie Mae owns my loan? Visit the HARP.gov eligibility page and use the Loan Look-up Tools to help you determine if your loan is owned or backed by Freddie Mac or Fannie Mae. After entering basic information (e.g., name, address) into the tool, you will receive an immediate response indicating whether Freddie Mac or Fannie Mae owns your mortgage. How do I find out if my lender offers HARP? We encourage you to call your lender as soon as possible and ask them if they participate in HARP. For your convenience, visit HARP.gov for guidance on how to get started. There you will find helpful links for lender information and lenders who work with existing borrowers. If your lender is not listed, it doesn't mean they don't offer HARP — reach out to them using the contact information on your mortgage statement and ask for the refinance department. If your current lender does not offer HARP, there are other lenders that you can contact. Review the list of participating HARP lenders, available under the "Resources" tab on HARP.gov, to find a lender who can discuss your options and eligibility with you. HARP.gov Frequently Asked Questions I tried to refinance through HARP when the program was first introduced, but I owed more than 105% of the value of my home. Should I try again? Yes. HARP has been enhanced since the program was first introduced in 2009. Now, HARP allows borrowers, who owe significantly more than their house is worth, to refinance and take advantage of today's low interest rates. If I owe more than my house is worth and don't have the money to pay my loan balance down, can I still refinance through HARP? Yes. HARP allows you to refinance even if you owe more than your house is worth. If you refinance under HARP and your new loan is a fixed-rate mortgage, there is no maximum loan-to-value (LTV) ratio. * If you refinance under HARP and your new loan is an adjustable rate mortgage, your LTV may not be above 105%. To calculate your LTV, divide the outstanding mortgage balance by the approximate value of your home. * The interest on any portion of your loan that is greater than the fair market value of your property is not tax deductible for federal income tax purposes. Please consult your tax advisor for more information. It is very time consuming to pull together all the paperwork to refinance. Do I need the same amount of paperwork to refinance under HARP? HARP offers a more streamlined process than traditional refinance programs, requiring less documentation and allowing for a smoother and faster transaction. Please contact a HARP lender for more details on what you will need to provide. I've had my loan for seven years and don't want to start all over again with a 30-year mortgage. Can I refinance into a shorter-term loan? Freddie Mac and Fannie Mae allow you to refinance into fixed-rate mortgages with terms anywhere from 10 years to 30 years. Check with your lender to see if they offer shorter-terms and ask about refinancing into a shorter-term mortgage. HARP.gov Is there a benefit for homeowners to shorten the terms of their mortgage? A shorter-term mortgage enables you to pay down the amount you owe much faster than a traditional 30-year mortgage. Furthermore, interest rates on shorter-term mortgages usually are lower than 30-year mortgages. The lower interest rate may allow you to shorten the term of your mortgage without much change in your monthly payment and you will pay less interest over the life of the loan. Can I refinance under HARP if my property isn't my primary residence? Yes. In addition to primary residences, HARP allows you to refinance even if your property is an investment property or second home. I live in a condominium. Can I refinance under HARP? Yes. HARP allows mortgages on condominiums to be refinanced. Freddie Mac and Fannie Mae guidelines indicate that I should be eligible for HARP, but my lender said I am not. Why? Freddie Mac and Fannie Mae purchase mortgages that meet each of their requirements from banks and other lending institutions. Lenders may have their own requirements in addition to Freddie Mac and Fannie Mae HARP guidelines. It is important that you reach out to your lender to discuss your eligibility for the program. My loan was previously modified; can I still refinance under HARP? You may be able to refinance with HARP as long as your original loan meets the basic eligibility requirements outlined in Question #1. It is best to speak with your lender directly so they can ensure you meet the other eligibility requirements for HARP. HARP.gov Frequently Asked Questions Will refinancing through HARP reduce the principal amount that I owe on my loan? No. HARP is designed to help borrowers get into more affordable loans, but will not reduce the principal amount you owe on your mortgage. However, refinancing through HARP can benefit you with a new loan that has more favorable terms, such as a lower interest rate that will save you money by reducing your monthly payment and the amount of interest that you pay over the life of the loan. Is HARP the only refinance program available? What if I am not eligible? HARP is only one of several refinancing options that may be available to you. HARP is unique because it enables homeowners with little to no equity in their homes to take advantage of today's low interest rates and other refinancing benefits. If you find that you are not eligible for HARP, we encourage you to contact your existing lender or another lender in your area to explore other refinancing options that meet your specific needs. Are offers from companies promising to help me get a HARP loan legitimate? Many borrowers have become wary of the multiple solicitations they receive to refinance their mortgage. Legitimate offers often have specific information identifying your current mortgage, including the loan number your mortgage servicer uses with your mortgage — which is printed on your statement. Valid offers will not require you to pay an upfront fee for services. If you are unsure if an offer is legitimate, we recommend you call your lender before responding to third-party companies that advertise themselves as "mortgage experts" or "foreclosure specialists" to apply for a HARP loan.

 

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