Refinance Plan Proposed by Obama Administration Gains Steam as Refinance Rates Decline

A stalled proposal to help homeowners refinance their mortgages to a lower mortgage rate is gaining steam in the Senate. Refinance rates on all types of mortgages have hit record lows recently but millions of homeowners are unable to refinance their loan either because they don't have enough equity in the home or are underwater on their mortgage, owing more than their home is worth.

Refinance mortgage rates today on 30 year conforming loans are averaging 3.52 percent and there are lenders offering 30 year conforming refinance rates well below the average. Some lenders are offering 30 year refinance rates as low as 3.25 percent with points.

Back at the height of the housing bubble in 2006, average 30 year mortgage rates were around 6.50 percent and just last year average 30 year rates were around 5.00 percent. If you bought a home between 2006 and 2011 the mortgage rate on your loan is higher than current mortgage rates but you're probably unable to refinance because the value of your home has declined since you bought it.

Loan Type

Purchase Refinance with Cash out Refinance

State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

FICO Score

Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)

Loan Amount

$

Points

Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points

LTV

%

Loan Term

 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM

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The lenders whose rates and other terms appear on this chart are ICB's advertising partners. They provide their rate information to our data partner RateUpdate.com. Unless adjusted by the consumer, advertisers are sorted by APR from lowest to highest. For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart. Advertising partners may not pay to improve the frequency priority or prominence of their display. The interest rates, annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind. Any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Although our data partner RateUpdate.com collects the information from the financial institutions themselves, the accuracy of the data cannot be guaranteed. Rates may change without notice and can change intraday. Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders. Please verify the rates and offers before applying for a loan with the financial institution themselves. No rate is binding until locked by a lender.

Lender

APR / Rate

Fees / Points

Payment

NMLS #1835285

5.707%

15-Year Fixed

5.500%

$5,404

Includes 0.851 points for $3,404

Lender Fees: $2,000

$3,269 /mo

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NMLS #1835285

6.620%

30-Year Fixed

6.500%

$5,000

Includes 0.750 points for $3,000

Lender Fees: $2,000

$2,529 /mo

Next >

NMLS #3030

6.658%

15-Year Fixed

6.500%

$4,000

Includes 1.000 points for $4,000

Lender Fees: $0

$3,485 /mo

Next >

NMLS #1835285

7.132%

5-Year ARM

7.000%

$5,328

Includes 0.832 points for $3,328

Lender Fees: $2,000

$2,662 /mo

Next >

NMLS #3030

7.350%

30-Year Fixed

7.250%

$4,000

Includes 1.000 points for $4,000

Lender Fees: $0

$2,729 /mo

Next >

Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.

There may be help in the Home Affordable Refinancing Program (HARP) which would allow you to refinance your mortgage with any lender through a government program. The program would allow homeowners to compare the lowest refinance rates available and not be limited to their current lender.

 This program will also allow homeowners to refinance with a higher loan-to-value ratio than the traditional 80% LTV that most lenders adhere to these days since the new loan would be backed by Freddie Mac or Fannie Mae. The fees charged by Freddie and Fannie for refinancing would also be reduced.

Bloomberg reports that the Obama administration is urging senators to vote as early as this week on expanding the Home Affordable Refinancing Program to include the new proposals mentioned above.  Democratic leaders are also considering adding the expansion to their agenda for the two-week Senate session.

The economy would get a jolt if these proposals are enacted. Millions of homeowners would have more disposable income because of lower monthly mortgage payments. For a typical homeowner with a $200,000 mortgage and a rate of 6.50 percent, the monthly payments are $1,073.64. Refinancing $200,000 to a 30 year loan at 3.25 percent, the monthly payments would be $898.09, a savings of $175.55 per month.