While the federal government contemplates increasing home-financing rates this year, rates are still at the lowest they have been since May 2013. During the fourth quarter of 2014, borrowers cut their mortgage rate by almost one fourth, or an average interest rate reduction of 1.3 percentage points, through refinancing.
There's a program the government created a few years ago called the Home Affordable Refinance Plan®, commonly referred to as HARP, which enables Americans to save big on refinancing when they otherwise could not due to a decline in the homes value. It provides you the opportunity to refinance your mortgage at surprisingly low rates, which could reduce your monthly payments. The average rate reduction was a 1.6 percentage points. On a $200,000 loan, that translates to an average savings of $3,300 in the first year. And with the low rates, 34% of homeowners were actually able to shorten their loan terms as well.
Homeowners are becoming increasingly savvy, and many are surprised to learn how much they're able to save on their mortgage while refinancing. The program started in March of 2009, but is set to expire at the end of December 2015, so it's vital to act fast. We recommend using our lending-finder service at LendingTree, which has a proven track record of helping consumers save money by comparison shopping for lenders.
A Stimulus Plan for American Homeowners
The program benefits the average American homeowners whose mortgage payments are current. The government wants lower rates to keep more Americans from foreclosing, which aids in the long-term economic recovery. The banks however, are less than pleased because HARP allows for 3 keys to keeping rates low:
- You can shop around for multiple lenders, so you're not limited by your current lender's rates
- Your home's loan-to-value is less than 125%
- Homeowners are not required to carry private mortgage insurance.
Thus, refinancing has become increasingly less expensive, and you're able to refinance your loan, no matter how much the value of your home has dropped or increased. Banks want to keep you at the higher rate, that's one of the reasons why the program comes with an expiration date, and that's why it's so important to move quickly.
The average monthly savings is nearly $275. Just think what you could do with the extra money every month. Plus, with the potential ability to shorten your loan terms, the HARP program really is saving money.
So how do you find these low rates?
To help you find low rates, our free service helps you easily connect with lenders specifically matched to your needs. In a few minutes, you could get a side-by-side rate comparison from multiple lenders and find out what loan offers you may qualify for. The service works with lenders throughout the country to help you locate the best match for your specific needs.
The program is set to expire
at the end of December 2015,
so it's vital to act fast.
When you consider that LendingTree's service is free, there are no obligations, and it only takes minutes to complete, the decision seems pretty simple. We'll match you with up to five competing loan offers by filling out 1 simple form.
We're one of the country's largest and most respected mortgage refinance comparison shopping websites, with HARP lenders in our network. We're currently connecting homeowners like yourself with multiple lenders to find mortgage rates.
With LendingTree there's no obligation and our service is fast and easy. It takes about five minutes, and the service is 100% free. You have nothing to lose.