It didn’t seem possible, but mortgage interest rates have been hitting record lows again in the past few weeks. Experts credit these lower interest rates, combined with the Home Affordable Refinance Program (HARP), with spurring on another wave of refinancing activity.
Nationally, mortgage rates dropped to 3.59% this week (May 21, 2012) for a 30-year fixed mortgage, according to Zillow.com. Across the country, mortgage rates range from a low of 3.55% in Georgia and New Jersey to a high of 3.69% in Hawaii, with Minnesota just over the national average at 3.61%. These rates also vary depending upon consumer credit rating, amount of down payment, and whether the loan is a new mortgage or a refinancing.
The impact of these historically low interest rates is significant over the life of the loan. A $200,000 mortgage for 30 years at 3.75% would result in a total interest savings of more than $53,000, as compared to a 5% loan for the same amount. The difference between a 3.125% 15 year mortgage and a 5% 15 year mortgage would be more than $33,000 over the life of the loan. These record-low interest rates may even make it worthwhile and affordable to switch from a 30 year to a 15 year mortgage for even greater long-term savings. A mortgage professional can assist you in evaluating your best options.
For those whose homes are currently valued at less than their existing mortgage, the Making Home Affordable HARP refinance initiative may help. HARP makes refinancing possible for certain homeowners who are current on their mortgage payments but whose homes are worth less in the current market. Freddie Mac or Fannie Mae mortgages where the current loan-to-value (LTV) ratio is greater than 80% and the homeowner has been current in the last year, may be eligible for refinancing under the program. Homeowners should consult with their mortgage provider to see if they participate in the program. This version of HARP ends December 31, 2013. For more information, visit the Making Home Affordable HARP page, FannieMae.com, FreddieMac.com, call 888-995-HOPE (4673), or consult with your mortgage professional.
Shawn Buryska ABR, CRS, GRI
Coldwell Banker Realty
Shawn Buryska, Coldwell Banker Realty, Licensed in the state of Minnesota