Read the key refinance-related news in this section. Here you will find a list of refinance updates that we have been publishing throughout the years.
FHA Refinances Soar on Reduced Fees
Submitted on September 5, 2012
Streamlined refinancing of FHA mortgages has exploded in the two months since HUD slashed the fees charged for the simplified transactions.
There were 27,753 FHA streamlined mortgage refinances in July, a 42 percent increase from June's level. That follows a nearly 200 percent monthly increase in June after the reduced fees took effect on the first of the month.
The July total sharply contrasts with the 5,756 FHA streamlined refinances approved in July 2011, a 347 percent annual increase. Streamlined refinances made up 89 percent of all FHA mortgages refinanced during the recent month, compared to 73 percent one year ago.
Total FHA refinances were more than double those of one year earlier, with 37,282 mortgages refinanced through the FHA this past July, up from 17,763 in July 2011. Of those, 8,352 were refinances of non-FHA mortgages a slightly lower figure than the previous year.
Upfront fee 0.01 percent
Although falling mortgage rates, which reached record lows during the summer, helped to drive up refinancing, demand for streamlined refis took off after HUD reduced the fees. Effective June 1, the one-time upfront charge for mortgage insurance on an FHA streamlined refinance was cut to 0.01 percent of the loan amount, a mere pittance, down from a full percent previously.
In addition, the annual fees were reduced to 0.55 percent, down from 1 percent previously. The reduction was designed to encourage borrowers to take advantage of lower mortgage rates.
An FHA streamlined refinance is a simplified way of refinancing for borrowers who already have an FHA mortgage. Approval is virtually guaranteed, as long as the borrower has kept up on the payments for the current loan. No credit check or proof of income is required, nor an appraisal of the property's value, which enables underwater borrowers who otherwise would have a hard time refinancing to qualify.
Homeowners who currently have a non-FHA mortgage cannot qualify for the streamline option but they can still refinance through FHA, though they would pay higher fees.
Income Rules Relaxed for Refinancing
Submitted on September 17, 2012
Fannie Mae and Freddie Mac are making it easier for borrowers with irregular income to refinance their mortgages through HARP, as long as they have other financial assets to draw upon.
Among other changes announced Friday, the two government-backed lenders will no longer require that borrowers have a documented source of income when doing a HARP refinance that would change their monthly payment by 20 percent or less. Instead, homeowners will be allowed to qualify if they can show they have financial reserves equal to at least 12 months of mortgage payments.
Accepted types of reserves include checking or savings accounts, stocks, money market funds, bonds, certificates of deposit and retirement accounts.
Self-employed, retirees could benefit
The change may benefit homeowners who would like to refinance but may have difficulty demonstrating adequate or regular income. These could include self-employed or retired borrowers, or those who recently underwent a period of unemployment.
In addition, Fannie and Freddie are simplifying the requirements for income and asset documentation on mortgage refinancing that would increase a borrower's monthly payments by more than 20 percent.
The changes apply to Fannie Mae's Refi Plus and Refi Plus DU refinancing programs, and Freddie Mac's Relief Refinance Mortgages, which are the lender's respective programs for refinancing mortgages under the federal Home Affordable Refinance Program (HARP) for borrowers with little or negative home equity.
On properties needing repairs or improvements, lenders may refinance mortgages on the property "as-is," with no requirement for such work to be completed prior to an appraisal as long as an appraisal of the property's current value is performed.
Refinancing Rises on Record Low Rates
Submitted on September 26, 2012
Mortgage refinancing activity hit its highest level since early August last week, as mortgage rates dropped to new historic lows, the Mortgage Banker Association (MBA) has reported.
Applications to refinance an existing mortgage were up 3 percent last week, according to today's weekly MBA mortgage applications survey, as interest rates on all types of fixed-rate mortgages fell to record lows.
Applications for mortgages to buy a home rose a seasonally adjusted 1 percent over the previous week and were running 5 percent ahead of the same week one year ago.
The increase came as fixed mortgage rates fell to the lowest levels ever reported in the survey, in the wake of the Federal Reserve' recent announcement that it would engage in a third round of "qualitative easing" in an effort to encourage lending and boost the economy.
Average interest rates on 30-year fixed-rate mortgages with conforming balances (less than $417,500) fell to a survey record low of 3.63 percent, down from 3.72 percent the week before. Average rates on jumbo loans ($417,500 or more) dropped to 3.87 percent, also a record, down from 3.99 percent previously.
On FHA mortgages, interest rates on 30-year fixed-rate loans fell to a record low 3.44 percent, down from 3.50 percent the week before. A new record low was also set on 15-year fixed-rate mortgages, which fell to 2.98 percent, down from 3.03 percent the week before.
Holding steady were initial interest rates on 5/1 adjustable rate mortgages (ARMs), which remained at an average of 2.61 percent, also a record low.
All figures are based on loans with at least an 80 percent loan-to-value ratio, the equivalent of a 20 percent down payment on a purchase mortgage. The MBA survey covers approximately three-quarters of the U.S. residential mortgage market each week.
Have you taken out or refinanced a mortgage recently? What sort of rate did you get? Let us know at https://www.mortgageloan.com/rates/map! Your fellow borrowers will thank you!
Refinancing Drops as Rates Climb
Submitted on June 5, 2013
Refinance demand fell for a fourth consecutive week as mortgage rates continued to climb last week, dropping to its lowest level in a year and a half.
Applications to refinance an existing mortgage were down a seasonally adjusted 11.5 percent last week, as average interest rates on 30-year fixed-rate mortgages topped 4 percent for the first time in over a year, according to the weekly Mortgage Bankers Association (MBA) survey. It was the weakest demand for refinancing since November 2011.
Demand for home purchase mortgage applications, which is less sensitive to swings in mortgage rates, was down only 2 percent for the week, but was still running 14 percent above its level of the same week one year ago. Refinancing fell to 68 percent of all mortgage applications, its lowest share since July 2011.
The Home Affordable Refinance Program (HARP) for low- and negative-equity mortgages accounted for just under one-third of all refinance applications, a figure unchanged for the last three weeks.
30-year rates hit 4.07 percent
Last week, the average interest rate for conventional 30-year fixed-rate mortgages rose to 4.07 percent, up from 3.90 percent the week before, for loans with at least an 80 percent loan- to-value ratio (equal to a 20 percent down payment). For jumbo 30-year loans with balances exceeding $417,500, the average was 4.20 percent, up from 4.07 percent previously.
For FHA loans, the average on 30-year fixed-rate mortgages rose to 3.76 percent, up from 3.62 percent the week before, again for loans with a loan-to-value ratio of at least 80 percent. Borrowers putting up the minimum 3.5 percent down payment required by FHA can expect to pay a higher rate.
The average rate on 15-year fixed-rate mortgages, often used for refinancing, rose to 3.23 percent, while the average on 5/1 adjustable-rate mortgages (ARMs) rose to 2.76 percent, up from 2.60 percent previously. Both are the highest either rate has been in a year. Again, rates are based on loans with at least an 80 percent loan-to-value ratio.