With mortgage interest rates being as low as they are, it has everyone asking questions about refinancing. Below are a few of the common questions that I field on a daily basis for folks in the the Dallas Fort Worth area and throughout Texas (and in all 50 states).
How low are Current Interest Rates?
(These Rates are current as of today 11/07/2012 – keep in mind rates fluctuate with the market and are subject to change until locked)
- Current FHA 30 Year Fixed Rates are at 3% (APR of 3.231%) with a $140 discount fee (still less than most lenders charge in lender fees alone – $796 in total lender fees)
- Current FHA 30 Year Fixed Rates are at 3.25% (APR of 3.276%) with a $4500 (2.25%) lender credit
- Current FHA 15 Year Fixed Rates are at 2.75% (APR of 2.797%) with a $2428 (1.214%) lender credit
- Current Conventional 30 Year Fixed Rates are at 3.5% (APR 3.652%) with a $942 (.471%) lender credit
- Current Conventional 15 Year Fixed Rates are at 2.875% (APR 3.047%) with a $784 (.392%) lender credit
- Current VA 30 Year Fixed Rates are at 3.25% (APR 3.276%) with a $4500 (2.25%) lender credit
- Current VA 15 Year Fixed Rates are at 3% (APR 3.047%) with a $3908 (1.954%) lender credit
- Current USDA 30 Year Fixed Rates are at 3.125% (APR 3.276%) with a $724 (.352%) lender credit
- Current JUMBO 5 Year ARM Rates are at 3.0% (APR 3.136%) with a $2765 (.553%) lender credit
Note, the above options are based on good credit scores on refinance loans with no cash back at closing. Total lender fees included in the APR are $656 to include processing and underwriting. (Currently, VA loans DO NOT have processing and underwriting fees). Third party fees not included in APR. Other rates and programs are available including loans with lower rates and lower closing costs – to get a FREE rate quote for your scenario, Click Here Now.
When does it make financial sense for us to refinance our mortgage?
There are a lot of well popularized rules of thumb such as “if your rate drops by a 1%”, but the simple answer is that it makes sense to refinance if you are planning to live in the home long enough to offset the cost of the refinance. For some folks, that’s 2 or 3 years, and some folks, they see the benefit from day one. Each situation is different, so it’s best do a true break even analysis to determine how your goals line up with the different benefits of refinance. Contact us today for a FREE Break Even Analysis for your specific situation along with a customized rate quote for a few different options.
How much are the closing costs on a mortgage refinance?
Anytime you close on a new mortgage, there are closing costs paid to the parties involved in fulfilling the transaction, such as processing, underwriting, appraisal, title, and recording fees. Closing costs vary from one transaction to another primarily based on property location and loan amount and type of loan. There are other factors that come into play as well, just be aware that costs can vary, but certain costs will remain the same regardless. For example, our office only charges $300 for underwriting and $325 for processing (unless it’s a VA loan, then we don’t charge these fees at all). In Texas, title policy fees are based on the loan amount and set by the Texas Department of Insurance, but in many cases come with a discounted premium if you’ve been issued a title policy on the same property within 7 years.
How are closing costs paid on a refinance?
Unlike on a purchase transaction, when you refinance your mortgage, most folks do not pay anything out of pocket (except for the appraisal if needed). Closing costs can be included in the new loan amount, paid by the lender using premium pricing (increasing the interest rate offered), or paid out of pocket.
Keep in mind, there is no such thing as a refinance that does not have costs. If the lender you are working with is offering you a “no closing cost loan”, you should as what the rate would be if you paid the lender, title, and recording costs out of pocket. Depending on how you long you plan on keeping the home, it might make more sense to go with the lower rate. You should be aware of all your options.
What if I have a FHA loan?
You might be eligible for a Streamline FHA Refinance program. This program has special features that make this a great choice for many FHA homeowners. Streamline FHA refinances do not require appraisals, and the process is streamlined to make for a quicker closing. Streamline FHA Refinances do not allow for closing costs to be included into the new loan amount, so you will either pay out of pocket or have your lender pay the costs with the interest rate selected.
What if I have a VA loan?
VA also has a streamlined refinance program called an Interest Rate Reduction Refinance Loan or VA IRRRL program. This program is similar to that of the FHA streamline refinance, but it’s specific to homeowners that currently have a VA mortgage.
On VA loans, we do not charge the processing and underwriting fees. Contact us for a Rate Quote.
Do I have to refinance with my current loan servicer?
No, you can refinance your mortgage with any lender that offers the programs that you need. For example, we offer all types of mortgage refinance programs including FHA, VA, USDA, Conventional, Jumbo, Streamline, and HARP programs. Regardless of your current loan servicer, we are able to assist you with your refinance.