It’s easier than ever for U.S. homeowners to .
Along with a plethora of “no equity” refinance programs from which to choose, rising U.S. home values have been a boon to homeowners waiting on HARP 3 to pass.
Current mortgage rates are at a 61-week low. It’s a terrific time to look at a refinance.
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Mortgage Rates Make 61-Week Low
According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage rate now stands at 4.10% nationwide. The rate is available to borrowers willing to pay 0.5 discount points at closing.
This is the lowest that mortgage rates have been since June 2013 — a span of 61 weeks.
With today’s mortgage rates at their lowest levels of the year, refinance opportunities have opened for U.S. homeowners. The typical refinancing household now saves more than 30% annually.
Plus, with home values rising, it’s easier for homeowners to qualify for the lowest available rates and APRs.
Based Federal Housing Finance Agency (FHFA) data, home values are up six percent since this time last year and a cumulative 15% since 2012. In some U.S. markets, values are up even more.
Fewer homeowners are underwater on their mortgages anymore.
As home values rise, FHA-backed homeowners are using their newfound equity to refinance out of their respective in favor of conventional mortgages for which mortgage insurance is cheaper and non-permanent.
Additionally, homeowners with mortgages not backed by Fannie Mae or Freddie Mac are finally getting their chance to refinance. The need for a “HARP 3”-like mortgage program can be muted when a homeowner’s negative equity position to turns positive.
There are millions of refinance-eligible households nationwide.
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What Is “HARP 3?”
HARP 3 is the highly-anticipated update to the Home Affordable Refinance Program (HARP), a refinance program which is currently in its second iteration.
The current version is known as HARP 2 and, alternatively, the “Obama Refi”.
HARP 2 gives refinance relief to U.S. homeowners whose homes have lost value since the date of purchase. It waives typical refinance requirements including the need for a home appraisal and the need to pay new private mortgage insurance (PMI) if home values have fallen.
More than 3.1 million households have used the to refinance to today’s low rates.
However, because the program is limited to homeowners whose existing mortgages are backed by Fannie Mae or Freddie Mac, millions of additional homeowners have been unable to HARP-refinance. This led to a push for “HARP 3”, a program update purported to include, among other features, an outlet for homeowners with non-Fannie Mae and non-Freddie Mac loans.
HARP 3 would have allowed homeowners with Alt-A loans, subprime loans, and privately-held mortgages to refinance via the Home Affordable Refinance Program. Earlier this year, though, the FHFA indicated that an update to HARP 3 was unlikely.
As home values rise, the need for HARP 3 lessens. Fewer homeowners are underwater and many of the HARP 3-hopeful can now refinance using a “traditional” refinance program via Fannie Mae or Freddie Mac, or via the FHA or Department of Veterans Affairs.
There’s still a want for HARP 3 lending, but that wants shrinks as the U.S. housing market recovers.
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Today’s Available Refinance Programs
For U.S. homeowners, there are a number of ways to take advantage of today’s low mortgage rates. Some of the most popular mortgage refinance programs include the following.
Conventional Mortgage Refinance
Available to all homeowners, conventional refinances are refinances done via Fannie Mae or Freddie Mac. They’re available as fixed-rate loans and adjustable-rate ones. Refinancing homeowners can do their refis as a rate-and-term refinance; a cash-out refinance; or a cash-in refinance.
Rate-and-term refinances are refinances via which you lower your mortgage, change your loan term, or both. A cash-out refinance is a refinance via which you extract equity from your home and receive it as cash at closing, or use it to reduce third-party debts such as credit cards and student loans.
A cash-in refinance is a refinance via which you bring cash to closing to reduce your overall loan-to-value (LTV) and get access to lower mortgage rates.
FHA Streamline Refinance
The FHA Streamline Refinance is a special refinance loan available to homeowners with existing FHA mortgages only. According to the program’s official loan guidelines, the waives income verification, credit score verification, and home appraisal.
Certain FHA-backed homeowners will get access to reduced FHA mortgage insurance premiums (MIP) when they refinance using the FHA Streamline Refinance.
In order to use the FHA Streamline Refinance, the FHA will require at least six payments on your current home loan and a history of on-time payments. If you refinance within the loan’s first 3 years, you’re entitled to a refund against your original upfront FHA MIP.
VA Streamline Refinance
The VA Streamline Refinance is available to homeowners with existing VA mortgages only. The program’s official name is the VA Interest Rate Reduction Refinance Loan ().
Similar to the FHA Streamline Refinance, the VA Streamline Refinance does not ask for income verification, home appraisals, or a credit score. The program’s main requirement is that the refinance homeowner gets access to a lower monthly payment or some other “tangible” benefit such as a conversion from an adjustable-rate mortgage to a fixed-rate one; or a shortening of a loan’s length from say, 30 years to 15 years.
VA refinances can close in as little as three weeks.
Get Today’s Refinance Mortgage Rates
Today’s mortgage rates are at a 14-month best and home values are rising. Millions of U.S. homeowners are eligible to refinance. Perhaps you are one of them.
Get started with a rate quote now. Mortgage rates are available online at no cost and with no social security number required to get started. There is no obligation to proceed.
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