Banks Block Obama on Mortgage Stimulus Plan Bloomberg
A U.S. program to help as many as 5 million homeowners refinance their mortgages is being hindered by reluctant lenders, suffering a similar fate to the government’s main foreclosure-prevention effort.
The Obama administration introduced the plan in April 2009 in a bid to prevent defaults among borrowers who were current on their payments but had little or no equity after the average home price had tumbled 33 percent since the July 2006 peak. The Home Affordable Refinance Program, known as HARP, was designed to allow these homeowners, who usually can’t qualify for new loans, to benefit from the lower rates engineered by the Federal Reserve to help stimulate the economy.
About 810,000 homeowners refinanced through HARP as of May, according to the Federal Housing Finance Agency, far short of the administration’s goal. The program’s limited impact threatens to prolong the nation’s foreclosure crisis while keeping billions of dollars out of consumers’ hands -- money that could flow into the economy in the form of additional spending or investment.
Should I Refinance My Colorado Springs Home?
With mortgage rates at all-time lows, you may be asking “Is now a good time to refinance?”. This short interview from NBC’s The Today Show offers good insight.
Refinancing a mortgage is about more than just “low rates”. For example, there are costs associated with giving a new mortgage and even with the average, 30-year fixed rate mortgage near 4 percent, the costs of a such a move can outweigh the benefits — both in the short- and long-term.
The video originally ran in September when mortgage rates averaged 4.09%. Rates are different today, but the offered advice remains relevant.
Some of the key points raised include :
The lowest rates come with the highest costs. Consider a slightly higher-rate option from your bank. Falling home values may make it harder to qualify for a refinance in the future. Your best time to act may be now. If you’re many years into a 30-year loan, you can consider switching to a 15-year mortgage to avoid “resetting” your term.And, lastly, the interviewee makes a strong point that your refinance should save you enough money to make paying the closing costs “worth it”. Make sure the break-even point on your closing costs versus your monthly savings occurs within a reasonable time frame.
At 4 minutes, the The Today Show video is short, but dense with quality information. For follow-up on whether a refinance makes sense for your situation, be sure to talk with your loan officer.
For more information, please contact the
Colorado Springs Real Estate Connection: 719.434.8346
Refinance Help. Fill this form and get help!
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