Qualifying For New Home Loan With Mortgage Late Payment

Refinancing Home Loans With Low Rates

ByGustan Cho

This ARTICLE On Low Mortgage Rates In 3 Years Fuel Refinancing By Homeowners Was PUBLISHED On August 21st, 2019

Mortgage rates on all mortgage loan programs are at a 3-year low, especially FHA mortgage rates.

  • Average 30 year fixed FHA mortgage rates are at 3.75%
  • Can FHA mortgage rates go any lower? 
  • FHA mortgage rates hit an all-time low of 3.25% back in late 2012 and early 2013 before it started spiking up in May of 2013
  • Nobody has a crystal ball
  • Mortgage rates will not stay at these levels forever
  • Many homeowners who planned on refinancing their home loans back in earlier 2013 but did not lock their rates saw a huge spike in mortgage rates
  • They could not refinance their mortgage loans
  • Mortgage rates literally went from the low 3.0%’s to the 4.0%’s and there was no coming back
  • Many mortgage companies who had hundreds of refinance mortgage loans in the pipeline without the mortgage rates locked ended up losing doing the refinances
  • Lenders lost tens of thousands of dollars in revenues

In this article, we will cover and discuss the Low Mortgage Rates In 3 Years Fuel Refinancing By Homeowners.

HUD’s Recent Lowering Of FHA Mortgage Insurance

The Department of Housing and Urban Development, HUD, has lowered the FHA annual mortgage insurance premiums for all FHA insured 30 year fixed rate mortgage loans from 1.35% to 0.85% which is a net 0.50% reduction back in 2013.

  • This reduction of mortgage insurance premium is part of the borrower’s monthly mortgage payment and the 0.50% reduction is a huge saving
  • For example, on a $400,000 mortgage loan, the monthly savings is $166.67 savings for the homeowner

The lowering of the FHA mortgage insurance premium from 1.35% to 0.85% enables homeowners who have purchased their homes in the few years to see if they can take advantage of the lower FHA MIP to save them tens of thousands of dollars over the course of their 30-year mortgage loan. This is by refinancing their current home loans.

Reduction Of FHA Mortgage Insurance Premium Can Save Homeowners Thousands

Homeowners who have recently purchased a home, even at low mortgage rates, can still benefit and save tens of thousands over the life of their FHA loan by taking advantage of the reduced annual mortgage insurance premium.

  • Even if they refinance their current FHA home loan at the same mortgage rate, depending on the size of their mortgage balance, they can still have a net tangible benefit and would be advantageous for the do a refinance mortgage
  • A licensed mortgage loan originator can go over whether it will be beneficial for them to refinance

Sometimes it may not be beneficial for them to refinance if they are intending in moving within the next two to three years.

Combination Of Low Mortgage Rates And Reduced FHA Mortgage Insurance Yields Great Savings And Time To Refinance

Homeowners who have obtained an FHA loan 2011 or later, the chances are that they have the higher FHA annual mortgage insurance premium.

  • These homeowners are the borrower’s who can greatly benefit from the current reduced 0.85% FHA annual mortgage insurance premium
  • The combination of the reduced FHA annual MIP and today’s near all-time low rates, homeowners do not realize the type of savings they can have
  • Real estate values have skyrocketed in many parts of the country
  • In some areas, housing prices have appreciated double digits year after year since 2010
  • Those homeowners with equity can even qualify for an FHA cashout refinance mortgage loan
  • Maximum loan to value on FHA cash-out refinance mortgage loans is capped at 80% LTV

With the proceeds, they can pay off their credit card balances or other debt.

Low Mortgage Rates By Refinancing To Conventional Loan

Also, homeowners whose homes have really appreciated in value and can qualify for a conventional loan can see if they can refinance their current FHA loan into a conventional loan. By doing so, they can avoid mortgage insurance altogether. Or can qualify for a no mortgage insurance required conventional loan. This is called lender paid mortgage insurance (LPMI) offered by Gustan Cho Associates.  If you are a homeowner who needs a free analysis of whether a refinance will benefit you, contact us at Gustan Cho Associates at www.gustancho.com or call us at 800-900-8569. Or text us for a faster response. Or email us at gcho@gustancho.com.

 

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