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Mortgage Interest Rates
Where are Mortgage Interest Rates at now and where are Mortgage Interest Rates headed?
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2 Replies
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Mortgage interest rates have shot up from 2.5% on a 30-year fixed rate mortgage 2 years ago to over 8% recently. Just starting two weeks ago, mortgage interest rates have started to drop. The economy is still not stable and anything can go. However, mortgage interest rates have dropped and is dropping significantly.
FHA Streamline Refinance and VA Interest Rate Reduction Refinance Loan (IRRRL) are two specialized mortgage refinancing programs in the United States that offer certain benefits to eligible borrowers.
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FHA Streamline Refinance:
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Purpose: The FHA Streamline Refinance is designed to help homeowners with existing FHA-insured mortgages to refinance with minimal documentation and underwriting requirements.
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Benefits:
- Reduced paperwork: FHA Streamline Refinance typically requires less documentation compared to a standard refinance.
- Lower upfront costs: The upfront mortgage insurance premium (MIP) is lower for FHA Streamline Refinance.
- Streamlined process: The name “streamline” suggests a simplified and expedited process, which can result in a quicker closing.
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Eligibility Criteria:
- The existing mortgage must be an FHA-insured loan.
- The refinance must lower the borrower’s monthly principal and interest payments or convert an adjustable-rate mortgage to a fixed-rate mortgage.
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VA Interest Rate Reduction Refinance Loan (IRRRL):
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Purpose: The VA IRRRL is a refinance option available to homeowners with existing VA-guaranteed home loans, allowing them to lower their interest rates and monthly payments.
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Benefits:
- No appraisal or credit underwriting package is required in most cases.
- Reduced paperwork: Similar to the FHA Streamline, the VA IRRRL has streamlined documentation requirements.
- No out-of-pocket costs: Borrowers can finance all closing costs and fees into the new loan or opt for a slightly higher interest rate to cover these costs.
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Eligibility Criteria:
- The existing mortgage must be a VA-guaranteed loan.
- The refinance must result in a lower interest rate, unless the borrower is refinancing from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
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Both programs aim to make refinancing easier and more affordable for eligible borrowers. It’s important to note that these programs have specific eligibility criteria, and borrowers should check with their lenders to determine if they qualify for either the FHA Streamline Refinance or VA IRRRL.
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Mortgage interest rates have substantially dropped the past two weeks. The Feds did not increase rates in the past six months. All signs indicate a refinance boom is coming. Many people who have rates in the mid to high 7% can start thinking about refinancing now. However, the key to get lower mortgage interest rates is higher credit scores. 740 plus credit score borrowers can get mortgage interest rates in the low 6% on FHA and VA loans. A little higher on VA loans.