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March 11, 2013
Refinance Before April 1stIf you have been considering refinancing and plan to do it this year, now is the time to take action. Outside of being able to get in on some of the lowest interest rates in history, there are changes coming down the pipeline after April 1st that could potentially cost you thousands of additional dollars over the life of your loan, and could even disqualify you from being able to refinance under certain government programs.

Federal Changes to MIP (Mortgage Insurance Premiums)

Mortgage insurance is typically required on any government backed loan where the loan-to-value ratio exceeds 80%, and is applied to the monthly mortgage payment to protect the lender against default.

Currently, once you have accrued 80% equity in your home, you can make a request to have the mortgage insurance dropped from your payment, but beginning April 1st, not only are insurance premiums increasing, but FHA mortgages will be required to carry MIP for the entire life of the loan.

Impending Rate Increases

We have been spoiled with consistently low rates for so many months, that many people may be becoming complacent. Don’t! Rates will not stay this low forever and additional points on your mortgage rate can cost you thousands upon thousands of dollars over the life of your home loan.

As unemployment numbers begin to decrease and quantitative easing comes to an end, we can expect the fed to make some changes and begin to see rates creep back up.

Changes Are Coming to Fannie and Freddie

Government backed lending giants, Fannie Mae and Freddie Mac, just announced that the operations of the two companies will be combined to form a separate company that will look after securitized home loans and a bipartisan group of former legislators has recommended a slate of changes to the governments role in the housing market that would include the eventual dissolution of the companies altogether.

Without the government-backed support from the likes of Fannie and Freddie, approval requirements to qualify for a refinance could potentially become much stiffer.

The atmosphere for refinancing is ideal right now and with economic and regulatory changes looming in the future, the question shouldn’t be, “should I refinance now?” but “why wouldn’t I refinance now?”.

To speak with one of our experienced mortgage lenders about refinancing your home loan, simply fill out our Fast Response form or give us a call at 888-644-1999. Our experienced mortgage professionals would love to discuss your needs. We can’t wait to hear from you!

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