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FHA and VA rates drop, should you refinance?

Posted on December 1, 2008 by Ray Williams (NMLS #216267).

The latest news is that the treasury is going to buy up agency debt, and mortgage bonds responded positively. What we saw off of that news was an initial push positive, then a retraction.

Recently 30 year fixed rates have been in the ranges of 5.5%-6% at this current time. If you have a VA or FHA mortgage this means, you may be eligible for a streamline refinance. This refinance is a non-requalifying refinance. That means, no appraisal, no income or employment verification, no asset verification. Overall, none of the pain you may have felt when you took out your mortgage last time. You will also skip a payment and receive a refund on your current escrow account balance.

So should you refinance? You want to look at a combination of things to determine if you should. How long do you plan on living in the home? Do you plan on converting this home into a rental later? What is your current rate? How much lower can you get your rate and thus your payment? What will it cost (or add to your current loan amount)? How long have you had your current mortgage? Has the person you are talking with understand the impacts of a refinance and has analyzed the financial impact on your family?

If you are sitting at 6.5% or higher on your current mortgage or higher, you may want to strongly consider the refinance, if done right. Afterall, saving $100 a month in interest will save you $36,000 in interest on your mortgage.

Call or email for more details, and to go over the positive and negatives of refinancing your current mortgage. And make sure to ask what a true no cost refinance is, with whoever you are talking too. Ray

rwilliams@summit-mortgage.com

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