Low Rates Make Streamline Refinance Feasible

Interest Rate Survey

Each week, Freddie Mac releases a Primary Mortgage Market Survey (PMMS) which stands as one of the most well respected tools in the market for monitoring national mortgage interest rate averages and trends.

Over the past few weeks we’ve been on a winning streak, interest rates have been sliding to reach levels not seen since October, 2013.

PMMS 7 Month Interest Rate Low

A year ago this month, interest rates began to rise sharply, catching many wanting to refinance off guard.

Since the last PMMS survey was published, for the week of May 29, 2014, rates have jumped back up, increasing as much as 2 times in a single day.

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FHA Streamline Refinance

The Streamline Refinance program is available to anyone with an FHA insured mortgage.

This program essentially allows borrowers with no late payments in the past 12 months to reduce your interest rate in certain situations, without an appraisal, income, or asset documentation.

This low cost refinance program was very popular during the record low interest rate streak that last almost 18 months before rates shot up a year ago this month, June 2013.

Homeowners with a FHA mortgage that either missed the last interest rate drop a year ago, or bought your home after June, 2013 using FHA financing, should know that the interest rates on Government insured loans are quite lower than the conventional financing rates reported in the chart above.

As of the writing of this article on June 1st, 2014, an interest rate under 4% is indeed possible.

VA IRRRL Refinance

VA offers a program very similar to the FHA Streamline refinance, except their program is call the IRRRL, or Interest Rate Reduction Refinance Loan.

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This program allows Veterans with an on-time payment history over the past 12 months to reduce the interest rate at a significantly reduced cost.

Both the FHA and the VA Streamline Refinance programs require less verification and paperwork as well, which is where the “Streamline” part of the program comes in.

Other Streamline Refinance Programs

There are other ways to “streamline” your current housing situation that can include:

  • Combining a first and second mortgage
  • Removing mortgage insurance
  • Pay off buyer assistance program
  • Cash out to pay off credit card debt or other life emergency
  • Home improvements
  • Reduce rate and payment
  • Convert permanent FHA Mortgage Insurance into reduced PMI
  • Pay off home early – Reduce term of loan

A combination of increasing equity, flexible PMI terms, and competitive conventional rates and guidelines has opened the doors to all kinds of options for homeowners.

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Permanent Mortgage Insurance Alternatives

Even though Conventional interest rates are higher than FHA rates in today’s market, the potential to remove or reduce mortgage insurance premiums are too great a motivating factor for many.

New homeowners buying with a FHA loan after June 3rd, 2013 may also be in a position to remove the permanent mortgage insurance in exchange for a more cost effective alternative.

Reading the Market

2014 has not started off as a particularly “hot” real estate market in all areas of California.

April Market SnapshotSome areas are still riding the 2013 equity boom, most areas of the State have cooled off in terms of volume and year to year equity growth.

As summer rounds the corner, many are preparing for a busy buying season.

This will be good for both home buyers and home sellers, for those that are prepared to take advantage of breaks in the market.

These low rates are not expected to last.  I have myself been predicting higher interest rates as signs of economic recovery seems imminent.

Prepare and be Empowered

The secret to taking advantage of quick shifts in the market, like the interest rate slide we’ve been on for nearly a month now, is to start the loan approval process as early as you can.

An experienced loan officer will help provide you with experience and insight into the financial markets to guide you through the decision to lock in your interest rate.

Refinance Options Analysis

Whether we are your first choice, or even if you’re already talking to a lender and would like a second opinion, we can help.

Give us a quick peek into your situation, and leave a brief description of your goals for best results:

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