If one thing is true in the world of FHA loans, it is that everything changes. The program is designed to be fluid, constantly evolving with the economy and the housing market. Naturally, this causes a fluctuation in mortgage rates. Here you will find some useful tips about knowing how and when to act for the lowest FHA refinance rates.
Current Rates for Federal Mortgages
Out with the old, in with the new! As 2014 begins, federal mortgages are experiencing rates at an all-time low. This means that if you have not recently refinanced your home, you are paying an outdated, higher interest rate. Refinancing now will reduce your monthly payment and the total amount of your loan. It is projected that rates will remain low for the first few months of the year, but will then begin to increase. This is the time to act, if you want to avoid regret later on in the year. Don’t miss out on your chance to lock in the lowest mortgage rate in history!
Even so, you should not just accept the first quote you get as gold. Do a little shopping. Compare quotes from several different lenders, taking into account both the interest rates and the closing costs. Before making a final decision, consider the overall quality of service for the loan provider. Do they have a solid history of closing their loans on time? This information can be gathered best through word of mouth (shopping lenders that your friends and family have experience with) and by reading online reviews for each lender. This step should not be grazed over, as the loan officer is the final say on everything, from rates to closing costs to available refinance options.
Another recent development in the mortgage world is that the Home Affordable Refinance Program (HARP 2.0) now has provisions for homeowners no matter how deeply under water they may be. Though you may owe a significant amount more than your home is worth, you can still refinance and reduce your interest rates. It just requires a little more shopping on your part. Even if one or two lenders claim you do not qualify for a HARP refinance, the third may very well accept you. Keep looking until you find the right loan officer for you.
What Else Affects FHA Refinance Rates?
The heaviest determining factor when it comes to all mortgage rates is the borrower’s credit score. The requirements for 2013 are no less stringent and they are not projected to change any time soon. The best way to ensure excellent FHA refinance rates is to put in at least a year of immaculate credit performance. Ideally you want to come in at 720 for the best rate. A score of 680 or higher will still get you a good deal. As your score drops, your rates rise and you will find the entire qualification process increasingly difficult. When it comes to owning a home, your credit is your best quality.
This does not just apply at the initial approving stage. In fact, most loan officers will order a second credit report shortly before closing the loan. Anything you do in that time period can and will affect your overall score. Opening up new lines of credit or charging up credit cards are big no-no’s if you want to keep your rate. If you met the lender’s requirements by a hair, such a slip-up could mean a last-minute rejection of your application.
Credit is not the only thing to be aware of in the time period between applying and closing. So many things must happen before the loan can be closed, and time is of the essence when it comes to FHA refinance rates. You should submit any requested documents within twenty four hours whenever possible. Make sure you can meet the appraiser’s appointment. Because lenders will be heavily backlogged for the first part of the year, any lapse in response from you could cause your application to be bumped down the line and closing to be delayed. Your rate is no longer guaranteed if this happens. It is best to check in with your lender at least once a week to make sure that everything is progressing smoothly.
As the year comes to a close, we find ourselves in a wonderful window for FHA refinance rates. Everyone is scrambling to take advantage and lenders are experiencing a refinance boom. Now is undoubtedly the best time to act. As for the how, if you make an educated decision about your loan provider, are prompt and proactive during the loan process, and have performed well in the last year’s credit activities, you are guaranteed a profitable result.