Yes, refinance mortgage rates are currently sitting near the lows of all-time, but that doesn’t necessarily mean that you will benefit with a new home mortgage refinance. Working hand in hand with credit ratings, a borrower’s home value can mean the difference between a great benefit refinance and a ho-hum deal.
The key loan-to-value (LTV), number for rate and refinance program qualification is 80 percent. That means if your home appraises for $100,000, the ideal loan amount would be $80,000 or lower to get in on the low interest rates with no monthly private mortgage insurance (PMI).
What may have been an 80% LTV scenario for a refinancing homeowner just a few years ago, could well be an 85%, 90%, 95%, or even higher scenario today, due to the dramatic drops in home value since 2007.
So you want to take advantage of current super-low refinance rates, but will fall into the 80 percent-plus LTV range, so what do you do?
If you do not currently have PMI on your mortgage, the first recommendation would be to contact a lender to see if you qualify for the Fannie Mae or Freddie Mac streamline refinance programs. If you are qualified, you will have access to the best-offered refinance rates at the “under-80%” pricing with no PMI (if you currently do not have PMI). As an added bonus, your LTV can go all the way up to 105 percent and you will still get the under-80% pricing with no PMI. In fact, appraisal requirements are even sometimes waived or reduced. It’s a great program for those in the over-80 LTV range with good to excellent credit scores.
You can contact the Refinance Toolbox at (888) 850-9888 to see if you qualify.
If you do not qualify for the streamline refinance, the probable next best refinance option is the FHA refinance program. FHA refinance rates are comparable and sometimes even better than conventional loan pricing for 80-plus LTV scenarios. There is monthly PMI with 30-Yr FHA loans, but it will drop after 60 months and when the borrower’s LTV reaches the 78 percent level.
October’s home sales numbers were released last week and show a 2.2 percent dip, weaker than expected. The weak housing market, unemployment, and tight credit are all contributing factors to the poor numbers. Many buyers worry home prices could fall further. Some can't sell their current home to upgrade to a larger home, either because they have lost equity or they can't find prospective buyers.
In stating the obvious, the housing market is still a muddied mess, and does not appear that it will strengthen any time soon. For those that plan to be in their home for at least five years, while carrying a relative high current mortgage rate, now could be one of the best times in history to refinance into a very beneficial new mortgage. The key is to refinance into the best refinancing option for which you are qualified.
If you are considering a home mortgage refinance now and need some help, have questions, or need some competitive refinance rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.
May the Mortgage Refinance Rates be with You!
Refinance Tool Box
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