Homeowners Should Consider Refinancing Sooner Rather Than Later

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The Federal Savings Bank informs readers of the current status on mortgage rates in America, as well as why refinancing may be an important step to complete now.

VA and FHA home loans at The Federal Savings Bank

The Federal Savings Bank

While rates are on the rise, The Federal Savings Bank reminds its homeowners that they are still historically low, allowing for significant savings over time.

Rising mortgage rates are leading to a dip in refinancing activity; The Federal Savings Bank promotes its struggling mortgage holders to refinance now before climb higher.

As reported by Mortgage News Daily, rates hit their highest levels since August recently, with the 30-year fixed-rate mortgage averaging 4.625 percent. This has led some current homeowners to refrain from taking out new loans in an attempt to lower their monthly mortgage bills.

The FHFA reported that one of the more popular refinancing vehicles, the Home Affordable Refinance Program (HARP), saw volume fall slightly during the second quarter of 2013 when compared to the two previous quarters. However, the FHFA also reported that despite this drop, HARP activity is on par with the same quarter last year.

During the second quarter of 2013, 279,933 refinances were completed through HARP. That brings the total number of HARP refinances completed since the program's inception close to 3 million.

Still, just as many homebuyers take out mortgages when rates begin to rise, many homeowners will likely focus on completing a refinance before interest rates go any higher. For current homeowners hoping to lower their monthly mortgage payments, the smart choice seems to be refinancing sooner rather than later. While rates are on the rise, The Federal Savings Bank reminds its homeowners that they are still historically low, allowing for significant savings over time.

“We keep track of all our lien holders and inform homeowners who walk in to speak to loan officers of the refinance opportunities the interest rate market is offering now.    

According to data from Freddie Mac, homeowners who refinanced their mortgages during the second quarter of 2013 will save approximately $6 billion over the next year.

However, trying to predict which way mortgage rates will go is a dangerous game for homeowners, making it prudent to invest in financing before rates go any higher.
Taking advantage of special programs

While HARP may be popular among many homeowners looking to refinance; eligible veterans have even more options.

For instance, The Federal Savings Bank offers the Interest Rate Reduction Refinance Loan (IRRRR), which can be a very attractive option thanks to its ease of use. For homeowners who already used a VA home loan to make their original purchase, the process is simple, requiring no Certificate of Eligibility, credit check or appraisal.

Also, veterans who take advantage of this program can roll the costs into the loan itself, meaning no out-of-pocket expenses.

In order to qualify, homeowners must: be current on their mortgages (with only one 30-day late payment within the last year), be lowering their monthly payment, occupy the property they're refinancing and have purchased the property with a VA home loan.
Additionally, while the VA Streamline Refinance loan does not provide cash, the VA Cash-Out refinance loan does, giving homeowners yet another option.

To discuss all refinance options, please contact a Federal Savings Bank loan officer at: 855-686-3883

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