My Article Directory

A thirty year fixed home mortgage refinance is presently priced from 4.750% to 5.250% charging the property owner minimal or no points for a Rate and Term refinance. The refinance rates change daily for home refinances depending on economic conditions, but haven't deviated from this range since April 2009.

Each bank has the advantage to offer their current customers a government stimulus refinance program from the U.S. Department of Treasury called the "Making Home Affordable" Plan. This mortgage loan plan allows home mortgage refinance with property valuation from the mortgage company's automated valuation process and also allows loan approval with a higher debt to income ratio than typically allowed.

The stimulus refinance program refers to the refinance of 30/20/15/10 year fixed mortgages. Some lenders added the 5/7/10 year ARMs.

This package is beneficial to property owners who have undergone the loss of a percent of their earnings and/or devaluation of their home due to general industry conditions. This plan offers aid to homeowners who have fallen behind in their monthly mortgage payments.

What the Plan Will Not Allow:

The automated valuation cannot show the property value over 105% of the current loan amount, 110% in certain cases.

The homeowner must be employed and cannot have become business owners in the last twenty four months.

The refinance must show a benefit to the borrower by dropping interest rate percentage and payment or taking the borrower from an ARM or pay option ARM to a fixed package.

*Also note the product will not allow a borrower to refinance second mortgages. Lines of credit are subordinated to allow the refinance to proceed.

When refinancing your mortgage, requesting your current bank's version of the "Making Home Affordable" package should be enough to let your mortgage company know the specific program you're interesting in exploring.

The stimulus refinance plan refers to the refinance of 30/20/15/10 year fixed mortgages. Some lenders added the 5/7/10 year ARMs. The mortgage package is basically a streamline refinance, but with the added advantage of no appraisal. In this economic atmosphere of declining market values and rampant employment losses, it allows a lower monthly payment and a substantial monthly savings.

Government VA and FHA home loans still allow the Interest Rate Reduction Loans with no appraisal except under certain circumstances. Homeowners currently in an FHA or VA loan should use this option as the stimulus plan cannot make the change from a government loan to a conventional conforming program. Government loan rates are about the same as conventional conforming rates. Both translate to sizable monthly savings for most refinanced mortgages with rates around 5% from a median 6.5% a year ago.

Paying points will allow an even lower monthly payment, but a homeowner should plan to remain in the property long enough to recoup the cost of the points paid. Each point represents 1% of the loan amount. The costs to close the loan may be added into the loan and refinanced as well so that no out of pocket expense will be incurred by the borrower.

Rates for loans less than a 30 year term are not as low. It appears mortgage companies are more interested in locking in a long term customer than short term ones. 3, 5 and 7 year ARM loans give no measurable break in interest rate from a 30 year fixed. It is thought a borrower set up their home mortgage refinance on a 30 year term, but make the payment based on the payment for the term they wish.

Call your current lender for information specific to your mortgage loan.