Refinance Applications Spike Due To Lower Rates

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#1
If you purchased or refinanced your home from 2011 until now you may want to look into refinancing. Ever since the selloff in the stock market began about a week ago investors have been dumping their money into bonds. When this happens interest rates tend to go down and we have seen numerous pricing improvements over the past week.

If you haven't looked into refinancing or even purchasing a home, now is the time with rates so low. Feel free to contact our staff here at 800-779-4547 and we would be happy to help price a scenario out for you. You can also reach me directly at: [email protected]
 
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delta97

LoanSafe Member
#2
If you purchased or refinanced your home from 2011 until now you may want to look into refinancing. Ever since the selloff in the stock market began about a week ago investors have been dumping their money into bonds. When this happens interest rates tend to go down and we have seen numerous pricing improvements over the past week.

If you haven't looked into refinancing or even purchasing a home, now is the time with rates so low. Feel free to contact our staff here at 800-779-4547 and we would be happy to help price a scenario out for you. You can also reach me directly at: [email protected]
What is FICO score requirement these days to refinance? LTV at 75%
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
#3
Hey Delta - I know Erik is our of town at the moment. So it may be a day or two before he can get back to you. But I let him know about your question.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#5
Hi Delta!
The FICO minimum on certain programs are 580 but that's typically for purchase only. If you have a 580 - 620 I may have an angle for you via refinance but you ultimately want to be above 620 for FHA and 640 is required for conventional financing.

VA - 580
FHA - 580/620
Conventional - 640
USDA - 580

Hope this helps and rates have continued to drop with the stock market still plummeting. I'm not sure how long this will last, it could be a week, month or maybe even years.
 

delta97

LoanSafe Member
#6
Hi Delta!
The FICO minimum on certain programs are 580 but that's typically for purchase only. If you have a 580 - 620 I may have an angle for you via refinance but you ultimately want to be above 620 for FHA and 640 is required for conventional financing.

VA - 580
FHA - 580/620
Conventional - 640
USDA - 580

Hope this helps and rates have continued to drop with the stock market still plummeting. I'm not sure how long this will last, it could be a week, month or maybe even years.
Thank you so much Erik. Just checked my latest FICO it is 633 . Need to work on getting 680. Regarding rates - they are gonna be only lower. So, I have time on my hands.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#7
Thank you so much Erik. Just checked my latest FICO it is 633 . Need to work on getting 680. Regarding rates - they are gonna be only lower. So, I have time on my hands.
Definitely, I watch rates daily and am signed up for a service that alerts me to what the market is doing. If you ever want to price something out to see what it would be either based on your current FICO or a potential credit score I would be happy to do that.

Good things to remember:
Keep your balances under 30% of the credit limits
Call your creditors and ask them when they report, for example if you pay a debt down and credit is pulled before it's reflected on the report your score will not change.
Don't pay off collections as they re-open the trade line and can actually impact your score negatively

Any other questions feel free to ask!
 

delta97

LoanSafe Member
#8
Definitely, I watch rates daily and am signed up for a service that alerts me to what the market is doing. If you ever want to price something out to see what it would be either based on your current FICO or a potential credit score I would be happy to do that.

Good things to remember:
Keep your balances under 30% of the credit limits
Call your creditors and ask them when they report, for example if you pay a debt down and credit is pulled before it's reflected on the report your score will not change.
Don't pay off collections as they re-open the trade line and can actually impact your score negatively

Any other questions feel free to ask!
Thank you for your input! I most definitely trying to do my best keeping credit card balances below 10% and all my debts were discharged in Chapter 7 in 2011. Just kind of shocked that my FICO is so low, considering that I have had a new credit card for the past four years which I am paying off every month religiously. Just got pre-approved for Barclays card, perhaps due to low number of open credit cards. What is the magic number to achieve 700 score? Three cards?

Waiting for $5,000 incentive credited by end year for perfect payments in HAMP . Ditech just confirmed that I am indeed getting it if continue being on time with my payments.

Keep you posted on my progress! Are you licensed in NY?
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#9
Thank you for your input! I most definitely trying to do my best keeping credit card balances below 10% and all my debts were discharged in Chapter 7 in 2011. Just kind of shocked that my FICO is so low, considering that I have had a new credit card for the past four years which I am paying off every month religiously. Just got pre-approved for Barclays card, perhaps due to low number of open credit cards. What is the magic number to achieve 700 score? Three cards?

Waiting for $5,000 incentive credited by end year for perfect payments in HAMP . Ditech just confirmed that I am indeed getting it if continue being on time with my payments.

Keep you posted on my progress! Are you licensed in NY?
The magic number for FHA is usually only 620, Conventional is 680 to start making it make sense over FHA and once you reach 780 FICO you can't get much better in terms of pricing.

When you say you received HAMP, we will have to get the modification reviewed to determine if it's an acceptable modification to refinance. Our company is licensed in NY, we're licensed everywhere outside of Hawaii.
 

delta97

LoanSafe Member
#10
The magic number for FHA is usually only 620, Conventional is 680 to start making it make sense over FHA and once you reach 780 FICO you can't get much better in terms of pricing.

When you say you received HAMP, we will have to get the modification reviewed to determine if it's an acceptable modification to refinance. Our company is licensed in NY, we're licensed everywhere outside of Hawaii.
I am not interested in FHA - it entails higher rates due to build in mortgage insurance, only conventional 3.5% if it is 20year fixed or 2.5% if it is 15 year. But I understand that I need 680 for it. My present HAMP is eligible to refinance. If not those rates, I am better off with 4.75% I have now with 21 years left to go till it is paid off. Thank you for your help Erik!
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#11
Definitely, so just to give you a realistic expectation. Those rates that you're speaking of are for Prime borrowers, where someone has a 780 FICO (or close to) and a significant amount of equity. You're not going to find a 3.5% rate or 2.5 on a 15yr with a credit score of 680/700. Just not going to happen yet unfortunately unless we see the market tumble a little further which may very well happen.

What you want to look at is determine how much you're paying for P&I now... and determine if you were to pay the same amount on the new mortgage - would you have it paid off before the old one. That's how you determine whether or not a refinance makes sense. Some people use a method of (you're going to be saving X amount of dollars over the term of the loan). That's not how I determine whether or not it's in a borrowers best interest to refinance. With a mortgage calculator as long as you have 3 of the 4 factors you can determine the 4th. For Example, if you put in how much you're paying now, the new interest rate and new loan balance you can then find out how quickly you would have the loan paid off by making the same payment.

If you need help with that calculation I'd be more than happy to assist you with it. We would have to first however price out the loan to see where you would stand now.
 

delta97

LoanSafe Member
#12
Definitely, so just to give you a realistic expectation. Those rates that you're speaking of are for Prime borrowers, where someone has a 780 FICO (or close to) and a significant amount of equity. You're not going to find a 3.5% rate or 2.5 on a 15yr with a credit score of 680/700. Just not going to happen yet unfortunately unless we see the market tumble a little further which may very well happen.

What you want to look at is determine how much you're paying for P&I now... and determine if you were to pay the same amount on the new mortgage - would you have it paid off before the old one. That's how you determine whether or not a refinance makes sense. Some people use a method of (you're going to be saving X amount of dollars over the term of the loan). That's not how I determine whether or not it's in a borrowers best interest to refinance. With a mortgage calculator as long as you have 3 of the 4 factors you can determine the 4th. For Example, if you put in how much you're paying now, the new interest rate and new loan balance you can then find out how quickly you would have the loan paid off by making the same payment.

If you need help with that calculation I'd be more than happy to assist you with it. We would have to first however price out the loan to see where you would stand now.
Thank you, presently I am at 3% for the next 10 months. It is safe to say that in a year from now 3% would be available to everyone who is breathing and has a permanent job, and 2% would be available to those with 780 score. I have time on my hands, I think. Ditech offered me 3.5% fixed for 40 years and no closing costs through my investor. I do not think it is a good deal at all.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#13
I honestly don't think that's a bad deal at all, what you were offered sounds great! A 3.5% rate on a 40 year loan, the 3.5% is below or right about at market (let's just say, somewhat close to) for as I was mentioning prime borrowers on a 30 year fixed. Instead you're being offered it on a 40 year term.

My thoughts - I would look at the loan your being offered as a blessing in disguise. We really can't predict the market as much as we used to be able to. You could be right or they could also go up, we don't know that. There is no pre-payment penalty on that loan I'm guessing, you can calculate what a 15 year payment would be and pay that or if you have a tight month you have the flexibility of paying the lower required amount. It would also lock you into something without closing costs, if you really didn't like the loan you could refinance again when the rates improve.
 
#15
Hi Erik & LoanSafe community,

I am looking to refinance, I'm just wondering how to go about choosing the best mortgage broker? Is there a way to get an estimate on possible refi options without dinging my credit?

my score now is about 695/705 depending on agency

Chapter 13 discharged and stated to be off my record this September.

Have significant equity in property, in San Anselmo, CA

current rate is 5.25% fixed on a mortgage of $530,000

am rebuilding credit... so I could wait to refinance, but if I can save sooner and it makes sense, ready to go for it.

Thanks!
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#16
Hi Letting Go in CA,
Ultimately you want to work with the company that will benefit you the most and the person you are most comfortable with. To answer your question about obtaining a quote without pulling credit, that is absolutely something that we can do. Some companies will require that you pull credit, and there is really no reason to. Interest rates depend on your credit, loan to value, occupancy type, program type and a couple other factors.

Do you have time to go over it on the phone? Feel free to reach out to me directly at 619-379-8999 and I would be more than happy to go over pricing with you.
 

cheri

LoanSafe Member
#17
If you purchased or refinanced your home from 2011 until now you may want to look into refinancing. Ever since the selloff in the stock market began about a week ago investors have been dumping their money into bonds. When this happens interest rates tend to go down and we have seen numerous pricing improvements over the past week.

If you haven't looked into refinancing or even purchasing a home, now is the time with rates so low. Feel free to contact our staff here at 800-779-4547 and we would be happy to help price a scenario out for you. You can also reach me directly at: [email protected]
Hi Erik, we got modified with an in house loan where they split loan in half to be able to afford payments back in 2011, our rate will go to 5 %, is it possible to refinance into a lower interest rate with out affecting our loan mod?
 
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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
#18
Hi Cheri,
The new loan after refinanced would be based off the payoff that we receive from your current lender. Unfortunately if they split the loan in half you would be forced to pay on the actual balance with of course a lower rate.

Refinance previously modified loan guidelines: Some modifications are not true "Modifications" and can be refinanced immediately. Typically if you didn't receive a principal forgiveness your loan would fall into this category. If you truly have a "Modified" loan you must have paid the loan modification for at least 24 months and can then refinance.