Should I Refinance My Home To The Lowest Rate Available?

Published on October 11, 2011 by

Mortgage interest rates are at record breaking lows. Many homeowners are wondering if they should refinance and there is lots of advice and rules of thumb to pay attention to and it can be overwhelming and difficult to make the best choice for yourself.

The NBC’s The Today Show recently provided a clip that addresses some of the concern and topics of refinancing with the current low interest rate. Refinancing will always have costs associated with it. Advertisements of no cost loans simply means one is not getting the lowest rate available to cover the costs involved in refinancing. Understanding all of the variables and option is difficult.

Some of the key points raised include :

  • The lowest rates come with the highest costs. Consider a slightly higher-rate option from your bank.
  • Falling home values may make it harder to qualify for a refinance in the future. Your best time to act may be now.
  • If you’re many years into a 30-year loan, you can consider switching to a 15-year mortgage to avoid “resetting” your term.

After all of the advice given in the clip and when asking around you simply need to make sure that your time frame for breaking even on the cost to refinance to a lower interest rate is reasonable to how long you plan to keep your home. Most homeowners will benefit from a refinance if they plan to stay in their home for at least two years.

If you have a VA Home Loan many of the concerns that are voiced are not applicable to you. The great benefits of a VA Loan make it extremely easy for you to refinance and streamline your loan to a lower interest rate. If you have any questions you can get a free consultation by calling 866) 825-6261.

Mortgage Interest Rates Fall Below Four Percent

Published on October 7, 2011 by

Freddie Mac PMMS average rates

Who would have ever thought mortgage interest rates would go below 4%. Couple years back when rates went below 6% we thought we were in record territory. The graph above shows how the rates have dropped over the past couple of years.

Not only are 30 year fixed rates breaking records but the 15 year fixed rate and adjustable rate mortgages too are record lows. There is also a great advantage and spread between the ARM vs the Fixed rates making it even more enticing. ARM’s are now below 3% so if you’re one of the average homeowners and won’t keep your mortgage for more then five years then now is the time to capitalize on huge savings with an adjustable rate mortgage.

With interest rates so low the home buying and affordability is at all time highs and there has never been a better time to purchase a home. The low interest rates are also maximizing the purchase power of every dollar. Interest rates have dropped due to the following reasons and will likely continue on the short term:

  • U.S. economics is poor and under performing
  • Uncertainty in the Eurozone consisting of multiple countries
  • The Federal Reserve’s economic stimulation

If you have a VA Loan you are in a great position to capitalize on the low interest rates since the guidelines and requirements are so minimal. In fact much of the refinance market currently may be credited to the VA Loans due to about every other loan making it nearly impossible to refinance at this time.

If you are interested in taking advantage of the low interest rates whether it’s for purchase or refinance then contact a loan officer toll free (866) 825-6261 and get your free consultation today.

Latest Data Supports Some Housing Value Improvements

Published on September 29, 2011 by

Case-Shiller monthly change (June - July 2011)

The latest data from Case-Shiller Index was released and it reflects that majority of the cities measured are reflecting and improvement in the value of homes. The index showed a .9% increase in values and only a couple of the 20 cities measured were lower in Las Vegas and Phoenix, with Denver remaining flat.

Does this mean that home values nationwide have hit a floor? Well as much as many of us would like to think so it may not be the case. Foreclosures started to pick up again and the lack of jobs and improvements in the economy simply are not supporting the idea of a recovery right now.

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The index is not always the most detailed or accurate data as well as many find multiple faults with the data. Regardless of whether or not you think the data is valuable one can start to recognize that we are seeing signs of improvement and hopefully for all of us it will continue to improve.

If you have any questions about any opportunities that may be available to you with the low home values and low interest rates then simply contact a loan officer today by calling toll free (866) 825-6261. You may be able to save thousands of dollars with a VA Streamline refinance or increase your purchase power on a VA Home Loan by working with the Best VA Loan Specialist's in the country.


Realtor Reports Higher Sales and Lower Supply

Published on September 27, 2011 by

Existing Home Sales Aug 2010 - Aug 2011

According to the latest data shown above the supply of homes for sale is continuing to drop and get to a more reasonable and normal level. Realtors are trying to communicate to everyone that the housing market is rebounding and that sales are increasing and supplies are dropping. While it may be true that sales increased there is still very little sales activity and while the supply is dropping there is still plenty of homes available for sale.

Distressed homes continue to be a major part of the housing market and sales. Almost one third of homes sold currently are distressed. Home sales continue to put along at a slow pace and the builders are not anxious to bring new supply to market.

So while things are improving they are far from good. There is also some increase in foreclosures recently with the current activity of accountability for the housing mess.

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Other noteworthy facts from the August Existing Home Sales report :

  • There are currently 3.58 million existing homes for sale nationwide
  • 29 percent of home buyers paid cash in August
  • Real estate investors bought 22% of homes in August, up from 18% in July

In addition to distressed homes being a major part of the purchase market it is also helpful to know that almost 30 percent of buyers are cash. This definitely supports the idea that its a great market for the rich and international buyers. If you are not rich and are looking to purchase a home know that the low interest rates have increased your purchase power significantly. Rates are so low that you should also consider refinancing any existing mortgages you may have outstanding.


Building Permits Extremely Weak, Continue to Fall

Published on September 23, 2011 by

Housing Starts 2009-2011

Home builders and housing permits are not looking very encouraging. Latest reports show that home builders are not very positive on the outlook for the housing economy now or in the near future.

It should come as no surprise that the lack of confidence by the home builders has resulted in less and less housing permits being requested and granted. Home sales have slowed down so much currently and there is very little incentive for builders to be taking risks with the current housing crisis.

With the foreclosures and the deep discounts on distressed properties there are very few that are willing to compete with a new home. Until we see an improvement in the housing market and clear recovery you likely won't see new homes springing up.

Now if you are custom building and hiring out a builder then you are likely going to get a great deal and the builders don't take as many risks with a custom build job. Don't count on seeing too many new homes that are built on speculation in hopes that the perfect buyer will come by and purchase the home that is available.

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If you have any questions about the current status of the housing market and how you may be able to benefit from the buyers market then simply call toll free (866) 825-6261. There is a great opportunity for purchasing and refinancing with the record breaking low interest rates of today.


Operation Twist and How It Impacts Mortgage Interest Rates

Published on September 21, 2011 by

Comparing 30-year fixed to Fed Funds Rate (1990-2011)

The Fed Funds Rate is not always going to parallel with mortgage interest rates. You can see clearly in the graph above how the spread between interest rates and the Fed Fund Rate will change over time. The Fed met today and announced Operation Twist.

Keep in mind that the mortgage interest rates are not set by the Feds. Rather the best way to keep an eye on what interest rates are doing is to watch the price of mortgage-backed bonds. There is very little consistency between the Fed Funds Rate and the mortgage interest rates where there they have been separated by as much as 5.29 percent, and have been as close as 0.52 percent.

Currently the spread/difference is 4% which means that there is plenty of room for the interest rates to move both up and down. Although based on the economy and the announcements from Ben Bernanke you could expect interest rates to remain low until the middle of 2013.

Interest rates continue to stay at record breaking lows. If you are in a position to purchase or refinance your home then you are very fortunate and will realize significant savings. With VA Home Loans the veterans are saving thousands of dollars with a simple streamline that lowers their interest rate and it takes very little effort to qualify. If you have a VA Loan and have questions simply contact a VA Loan Specialist for a free consultation (866) 825-6261.


Looking at Mortgage Rates This Week : September 19, 2011

Published on September 19, 2011 by

FOMC meets September 20-21

Last week interest rates rose just a bit with the concern in Europe seeming to ease. The additional stimulus that is being proposed in the U.S. also supported the slight increase in interest rates.

The Federal Open Market Committee will be meeting for a couple of days to announce a new stimulus plan. In the past couple of years whenever the Federal Reserve has stimulated the economy interest rates have fallen. With interest rates already at record lows what will happen this week?

There is some additional data to be released this week including the Existing Home Sales and Housing Starts but the focus will very much be on the world's central bankers as they address the concerns in Greece.

If you are looking to refinance or lock in your interest rate on a purchase at this time just keep in mind that interest rates rise much faster than they fall and with rates at record lows you are in a great position now to lock things in and stop putting your interest rate at risk. If you have any questions contact a loan officer for a free consultation toll free (866) 825-6261.

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15 Year vs 30 Year Fixed Rate Mortgages

Published on September 16, 2011 by

Comparing 30-year fixed rate mortgages and 15-year fixed rate mortgages

All mortgage programs are hitting record breaking lows. That includes Adjustable Rate Mortgages and also 15 year fixed rate loans. The difference and spread of benefits and cost savings compared to a 30 year fixed rate is increasing. The advantage of taking a loan or mortgage product other than a 30 year fixed is much more appealing and much more often the better financial decision.

The savings one is getting and exploiting in this poor economy is tremendous. Whether you plan to stay in your current home long term or short term there is very often a loan product that is better for you than the 30 year fixed rate. Consider that with a 15 year fixed rate loan you will save over 46% in total payments saving. So, on a $200,000 loan you would save $94,000 in interest payments with a 15 year fixed rate loan.

Obviously with a 15 year loan your payment will be higher than any other mortgage program due to the shorter term. If you don't plan to stay in the home long term or to pay off your home then it would be wise to consider an Adjustable Rate Mortgage based on how long you plan to keep the home to maximize your savings.

If you have any questions contact your loan officer and make sure you consider all of your options specific to your needs. You can always get a free consultation by calling toll free (866) 825-6261.


Foreclosures Slow While Default Notices Increase Sharply

Published on September 15, 2011 by

Foreclosure Change August 2010-2011

The foreclosures are slowing down nationwide and it's definitely reflected in the top ten states in the country responsible for foreclosures. The graph above shows you how the activity is slowing down which many are trying to spin into a positive sign for a housing recovery.

The bigger news is likely the sharp increase in default notices which definitely indicates that there is not a strong recovery if any in the works. The states below are the current numbers from the states with the most foreclosure activity:

  • California : 18 percent of bank repossessions
  • Florida : 8 percent of bank repossessions
  • Georgia : 7 percent of bank repossessions
  • Michigan : 6 percent of bank repossessions
  • Texas : 6 percent of bank repossessions
  • Arizona : 6 percent of bank repossessions

The good news is if you're a buyer you have many option available to you and an extremely strong buyers market with historically low interest rates maximizing your purchase power. The option to purchase one of many foreclosed or distressed homes is providing huge savings. The average savings on a distressed home is about 20 percent currently and could go higher if more foreclosure activity continues.

If you have any question as a buyer or homeowner looking to refinance then simply contact a loan officer now and get a free consultation, call now toll free (866) 825-6261.


Low Interest Rates Are Not The Only Places To Save Today

Published on September 14, 2011 by

Mortgage interest rates continue to go lower and lower and we hear about it all the time. Many are unable to refinance due to lack of equity and property values in their homes or their credit scores have taken a dip due to the poor economy. Unless you have a VA Home Loan that is, with a VA Loan you don't need any equity or minimum credit score so if you have a VA Home Loan then you should contact the Best VA Loan Specialist's in the country and find out how much money you could save today. Call toll free for a no obligation loan comparison (866) 825-6261.

In addition to the low mortgage interest rates there are other places to look for savings in such a difficult economy with the rates low in every category in addition to mortgages. NBC's The Today Show aired a short piece with a few additional ways you could capitalize on during the slow economy.

  • Refinance your vehicles while rates are low
  • Transfer debts to low teaser rate offers
  • Transfer savings to online banks that pay higher interest rates

Take a look at you finances and see if there is an opportunity for you to save money on lower interest rates but also you may be able to earn more by being a bit more savvy with your money. Every penny counts in this economy and many of the ideas are very simple and easy.

If you have a mortgage you should contact a loan officer today and see if there is an opportunity for you to capitalize on regardless of what type of mortgage you may have. All mortgage interest rates are at all-time lows and often it's where you will see the biggest savings. Many that refinance are able to save hundreds of dollars every single month and ultimately they all save thousands of dollars over the life of their loan. Call now for a no obligation loan consultation toll free (866) 825-6261.