To Refinance or Not To Refinance?

Have you ever heard the pearl of wisdom that states you should only consider refinancing if the new interest rate is at least 2 points lower than your current one? Maybe that was good advice several years ago, but since refinance costs have been falling recently, it could be a good time to take a serious look. A refinanced loan is often worth its cost many times over, considering the advantages that it brings, in addition to a reduced interest rate.

Advantages

When you refinance, you may be able to lower your interest rate and mortgage payment , perhaps significantly. You might also have the option to "cash out" a portion of your equity, which you will be able use to take care of higher interest debt, make home improvements, or plan a vacation. You could be able to refinance to a shorter-term mortgage loan, enabling you to add to your home equity faster.

Fees and Expenses

All of these advantages do cost something, though. You will pay the same kinds of expenses and fees as you did with your current mortgage loan. Included in the list can be an appraisal, underwriting fees, lender's title insurance, settlement costs, and other fees.

Do the Math

You might consider paying points to reduce your interest rate. Your savings on the life of the loan might be significant if you've paid up front about three percent of the new loan total. You might be told that points may be tax deductible, but because tax regulations can be ever-changing, we urge you to consult with your tax professional before making decisions based on this.
Another thing about taxes is that when your interest rate is reduced, naturally you'll also be lowering the interest amount that you can deduct on your taxes. This is another expense that some borrowers take into account. We can help you do the math.

In the end, for most borrowers the total of initial costs to refinance are paid back very quickly in savings each month. We'll work with you to figure out what mortgage loan program is ideal for you, considering your cash on hand, how likely you are to sell your house in the next few years, and how refinancing might effect your taxes. We would love to get you started.

For even more information about why you should consider refinancing, view this article here.

If you'd like to know more about refinancing your home,  call us at 877-828-8851.

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Mortgage Default Rates Drop as Economy Improves

As the economy continues to improve, consumer debt continues to decline. Because Americans now have less debt overall, consumer default rates have decreased for mortgages and automobiles alike! This means that the financial condition for consumers is getting better as the economy stabilizes.

The national default rate for mortgages fell to 1.31 percent in the month of April, which is down from 1.41 percent in March.  This data is according to S&P Dow Jones and Experian Consumer Credit. They've worked together to build a comprehensive measure of the changes in consumer credit defaults. Mortgages are doing well, but bank cards saw a small increase in default rates.

Unemployment rates are still somewhat high, but the good news regarding the decline in default rates indicates that the recession is truly behind us. Some cities have reached new post-recession lows in regard to default rates.

If you feel you are in danger of defaulting on your mortgage, seek financial help! Perhaps refinancing could save you from your situation. View the links to the right for information on a couple companies that we'd recommend!

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Housing Market Outlook for 2013

After a rough few years, the housing market and the economy are finally on an upward trend! Housing starts, prices and confidence are showing better figures everyday. Of course there are always ups and downs, and while some investors are still being cautious about jumping into the market, 2013 is promising to bring a more competitive market for homebuyers.  With the housing inventory as low as it is, experts wouldn't be surprised if bidding wars break out among investors and homebuyers. It is expected that homes will sell fast in 2013 as long as they are priced right. It is a homesellers market!

When the market was experiencing buying dry spells during the recession, the Federal Reserve dropped interest rates to record-lows in order to lure buyers. Now that things are steadily improving, the rates may begin to slowly climb upward, however experts are not expecting significant jumps. Some banks have already vowed not to touch the interest rates until the unemployment rate drops.  Even if mortgage rates do inch upward, they are expected to remain around 4% which is still remarkably low compared to years past.

Mortgage rules are always being amended in order to prevent fraud and reckless lending to the underqualified. The Consumer Financial Protection Bureau recently issued new mortgage standards with new criteria for qualifying for a loan. Some of the new rules state that a qualified mortgage cannot include risky features like interest-only payments or negative-amortization payments. Loans cannot have fees and points above 3% of the total mortgage, and the total debt-to-income ratio must be limited to 43%. Some experts are concerned that these tighter rules may restrict credit and discourage lower-income homebuyers. Additionally, there are new rules designed to stop over-borrowing. Some fear that this could make the process longer for potential homebuyers or even prevent some from qualifying. Those looking to purchase a home should begin the mortgage lending process at least three months in advance since some of the new lending standards may cause time delays.

The new rules aside, 2013 is expected to remain in this upward trajectory. Home pricing indexes started to rise last year and promise that home prices will continue to increase. This will encourage homeowners to want to sell again, and cause homebuyers to jump in quickly before the prices rise too high. It is expected that home prices will jump 6% this year.

We already mentioned that housing inventories are low. They've been steadily falling since 2007. If the inventory remains at a below-normal level, some fear that this will hold back home sales and impede the market's recovery. However, rising home prices should help to increase inventories. Housing construction is up 60% in the last two years as well, however it is still far from where it should be. It is estimated that roughly 1.5 million units need to be built every year to keep up with housing demands. Last year, only 600,000 were built, and experts are expecting 750,000 to be constructed in 2013. With high building-material costs and a lack of skilled laborers, builders confidence is moderate, but there is potential for this to all improve this year.

As far as foreclosures go, there are still more than a million homes in the process but the overall crisis is nearly at an end. As the market improves, more and more people are taking advantage of foreclosures and short sales. Some investors are even buying homes at 50 cents on the dollar, renovating them, and putting them back out there which helps to stimulate the market.

2012 saw a refinancing boom because of low interest rates, but 2013 is expected to slow. Refinancing helps to boost the economy by reducing payments so homeowners have more money to throw toward consumerism. Refinancing will only continue booming as it did in 2012 if eligibility requirements expand or if rates drop further. However, borrowers looking to refinance should start the process now!

Overall, the complexities of the housing market are very reliant on a tug and pull system. Something increases and causes something else to decrease, but the balance is improving and 2013 is expected to be a strong year for all involved.

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HARP Benefits Underwater Borrowers

Since HARP began in April 2009, more than 2.2 million homeowners have refinanced. In January 2013, there were roughly 97,600 HARP refinances, which shows that HARP continues to be a benefit to underwater borrowers. 25% of the loans refinanced through HARP had a loan-to-value ratio greater than 125%. Also, 18% of HARP refinances for underwater borrowers were for shorter-term mortgages such as 15 or 20 years, which would help build equity faster than a traditional 30-year mortgage.

This information comes from the FHFA's January 2013 Refinance Report which suggests a high refinance volume with nearly 470,000 refinances completed in January, including the HARP ones.

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Mortgage Delinquency Rate Declines 14% in 2012

The national mortgage delinquency rate is defined as the rate of borrowers who are 60 or more days past due on their monthly mortgage payments. The amount of people who fall in this category has declined for the fourth consecutive quarter. Q4 of 2012 saw a mortgage delinquency rate of 5.19% which was down from 5.41% in Q3, and 6.01% in Q4 of 2011. Statistics aside, delinquency is decreasing. This means that as the economy continues to recover with time, more and more people are able to continue paying their monthly payments.

This was the largest yearly decline that the delinquency rate has seen since the recession officially ended, but we still have a long way to go to radically improve life for homeowners. In 2007, delinquencies rose 54%. They rose 53% in 2008 and 50% in 2009. Since then, the decline has been much more gradual than the rise was. It dropped 7% in 2010, 6% in 2011 and now 14% in 2012. We are on the right track but the overall levels are still high compared to where they sat before the recession hit.

If more borrowers can qualify for refinancing, they can obtain lower interest rates that will ultimately lead to lower monthly mortgage payments. This lends to fewer foreclosures and fewer delinquencies. If you are having difficulty paying your mortgage, Quest Loans can help you apply for refinancing. Call us at 888-883-5252 for more information, or visit QuestLoans.com!

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"The Responsible Homeowner Refinancing Act of 2013"

How would you like to be among the millions of responsible homeowners who can refinance their mortgages at a lower rate in order to save thousands of dollars each year? It's within your reach! Especially now that U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) have introduced this legislation in the 112th Congress. It is called "The Responsible Homeowner Refinancing Act of 2013" and it plans to remove the barriers that are currently preventing borrowers from obtaining the lowest rate possible.

This bill would streamline refinancing as we know it for all of Fannie Mae and Freddie Mac's borrowers whether they are underwater or not. Up-front fees would be reduced, appraisal costs for borrowers would be eliminated, and the HARP program would be extended by one year to allow eligible borrowers to take advantage of it.

"We need to bring much-needed relief now to hard working, responsible homeowners who are struggling to keep up with their high interest rate loans" said Sen. Menendez. “We need to do this before interest rates go up again. It’s time that Congress finally put families first and give homeowners who have played by the rules a fair chance to refinance at today’s low rates."

He also adds that this will be done at no cost to taxpayers and that it is intended to stimulate the economy. It has been referred to as a "No-Brainer".

According to Senator Boxer, "this bill is a win-win!" She goes on to say, “Homeowners will have more money in their pockets, Fannie and Freddie will see fewer foreclosures, and the housing market and economy will continue building momentum. That’s why the Menendez-Boxer bill has such broad support from industry and consumer groups. We should take action on this common-sense plan immediately while interest rates remain low so American families can realize major savings.”

With the recent record-low rates for a 30-year mortgage averaging around 3.53%, you could be one of the nearly 12 million homeowners guaranteed by Fannie Mae and Freddie Mac who could refinance! There are many who are not currently able to refinance because of policies and high fees, but if the Menendez-Boxer bill goes into effect, all that red tape would be gone!  In fact, through HARP, the average homeowner saves $2,500 per year as it currently is. The bill plans on increasing that amount by expanding refinancing opportunities for all those who are eligible.

If you are ready to take advantage of the current low rates, find out if you are qualified for a loan now! Call Quest Loans at 888-883-5252 to find out when it is the right time for you to refinance! We will answer all your questions!

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Refinancing Your Mortgage Can Save You Money!

Freddie Mac has released more information that only further proves the benefits of refinancing. The results of its Q4 refinance analysis shows that 84% of homeowners who have refinanced their first-lien home mortgage either remained at the same loan amount, or managed to lower their principal balance. This helps to strengthen their fiscal house. On average, those who have refinanced were able to reduce their interest rate by 1.8 percentage points.

In December, Fixed-Rate mortgages averaged low percentages. 30-year loans were around 3.4% and 15-year loans averaged 2.7%. Because of these low rates, refinancing can help you save money on your overall mortgage. For example, when a loan for $200,000 is refinanced using these average statistics and percentages would translate to a saving of roughly $3,600 in interest for the following 12 months.

Through the HARP program, borrowers have been able to refinance when they traditionally would not have had access to it. They've obtained low rates that have significantly reduced their monthly payments. As a result, the risk of foreclosure is decreased for these borrowers since they are able to continue paying affordably.

Quest Loans specializes in HARP loans, and in refinancing.  We would like to help you qualify for an HARP loan if you have low income needs. If you already have a HARP loan, or any other type of loan, ask us about refinancing! It is never too late to start saving money on your monthly mortgage payment! 888-883-5252

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Increase in Purchase Applications

According to the Mortgage Banker's Association's Weekly Mortgage Applications Survey, the week ending January 18, 2013 brought about a 7% increase in mortgage applications. This is being counted on a seasonally adjusted basis. Unadjusted statistics show that the number of mortgage applications being filed increased by 8% from the previous week. Refinancing also increased by 8% for the week. This shows that the economy is recovering well despite the recent expiration of the homebuyer tax credit. The interest rates are still low, which is a huge benefit to those looking to purchase a home in the coming months. If you are among those people, give Quest Loans a call. We'll help you get the application process going! 888-883-5252.

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Number of Home Sales Rises in October

Compared to last year, the month of October saw a 17.8% rise in home sales. This means that more people are buying homes and taking advantage of the low interest rates!

Also, the Median Home Price has gone up, meaning that you could potentially sell your home for a higher amount than you could in previous months.

If you are looking to buy a home, the overall inventory of available houses is declining so it may be harder to find the perfect home for your family. However, if you do find a suitable candidate, the low interest rates are in your favor!

If you find that these statistics are pleasing to your pocketbook, don't hesitate! We'd love to help you start the loan application right away.

Keep in mind that Quest Loans specializes in HARP and FHA loans, as well as refinancing! Give us a call today! 888-883-5252

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Shorter-Term Refinancing to Prep for Mortgage-Free Retirement

The newest trend in the home-buying game is refinancing into 15-year loans. More homeowners than ever are going down this route due to mortgage rates consistently falling to record lows. According to Freddie Mac's most recent mortgage rate survey, the 30-year fixed-rate loan averaged at 3.75% which is down from 3.78% last week. On that note, the 15-year fixed loan's average is currently at 2.97%, down from 3.04% a week ago. Unfortunately, most of the homeowners who are able to benefit from the low refinancing rates in this troubled housing market are those who have significant home equity. Many homeowners are considering shorter-term loans so they can have the payoff coincide with their retirement plans. Despite having to pay more per month for these shorter-term loans, having their homes paid in full when retirement comes around would be ideal for any homeowner. Those that are able to do this have statistically been people in their 40s and 50s whose incomes now allow them to pay off more principal every month. If you are interested in refinancing your home to take advantage of these great rates, Quest Loans can set you up with a professional lender today! Call 1-888-883-5252.

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Obama's Foreclosure Prevention Plan

How would you like to save $3,000 per year on your mortgage? That's exactly what President Obama is working to do for American Homeowners. He announced on February 1st that he has a plan to help homeowners like you to refinance your mortgage. Why? The goal is to help stabilize and boost the housing market again. Although, this plan is expected to cost between $5 billion and $10 billion to put into effect. Obama plans to get the funds for this by putting a fee on large banks.

The programs associated with this plan will give lenders and other stakeholders the tools they need to help borrowers with their mortgage woes and to ultimately increase the country's confidence in the real estate finance system.

The Obama Administration, Congress and the National Association of Home Builders will continue looking for ways to increase refinancing opportunities, to reduce the inventory of foreclosed homes and to hopefully prevent additional homes from falling into foreclosure.

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Is Freddie Mac Betting Against You?

The Government-Owned Mortgage Company, Freddie Mac who specializes in helping homeowners get affordable mortgages, has reportedly been "betting" against homeowners. The "bet" comes in the form of investing in securities called "inverse floaters" that will receive all the interest payments from specified mortgage-backed securities. Basically, the bet will pay off if people cannot refinance. The shocking thing is that these investments are actually legal.

If people were to pre-pay their old loans and refinance them to receive cheaper new loans, Freddie Mac would lose money. However, the more people that cannot refinance, the more money Freddie makes because it will receive money from these older loans with higher interest payments.

The thing that is causing such an outrage among Americans is that Freddie Mac, and it's counter-part Fannie Mae, are not privately owned entities anymore. They are part of the government since Congress adopted them in 2008. Therefore, these highly offensive investments that Freddie is making to generate profit are using taxpayer dollars. You are paying for them to bet against you. Many Americans are already blaming these companies for the housing boom and the subsequent bust, so adding this bet to the picture does not make for happy citizens.

Popular opinion in the finance world is that the number of foreclosures would drop if Americans could refinance their high-interest rate loans. Freddie Mac is supposed to help with that. They actively campaign to get borrowers to realize the benefits of refinancing. However, this is not profitable for them which is where these bets have come into play. Despite Freddie's activity, though, President Obama himself has recently mentioned his commitment to helping homeowners with their mortgage worries.

In his State of the Union Address, he noted that he will be sending a plan to Congress that would give "ever responsible homeowner the chance to save about $3,000 a year on their mortgage by refinancing at historically low rates." Obama even promised that there would be "no more red tape. No more runaround from the banks."

So what do you think? Relief for homeowners is promised, but will it happen? Do you think it should be illegal for this government-owned company to be "betting" against you as a struggling homeowner?

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Bank of America Suspends Cash-out Refinancing

For the second time in four months, Bank of America Home Loans have decided to suspend cash-out refinancing. The first time was in October when they suspended cash-out transactions insured by the Federal Housing Administration and the Veteran Administration.

According to the U.S. Mortgage Market Index report for the week ended January 13th, inquiries for refinance loans have climbed 107 percent since the end of 2011. BofA's recent decision has come about because of this elevated volume of refinance activity. They say that cash-outs will continue to be on hold until this elevated activity recedes and until it is clear that overall processing for non cash-out transactions will not be negatively impacted from the resumption of cash-out lending. Cash-out transactions that are already in process will not be impacted by this recent decision.

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