The Veridian Blog

The mortgage landscape added a few twists during the last month to allow more homeowners opportunities to refinance their mortgages and lower their monthly payments.

In addition to already historic low 30-year fixed mortgages, these are the three major changes that have taken place most recently:

1. The new high-balance conforming limit hit $729,750 a few weeks ago thereby allowing homeowners with balances between the previous limit of $625,500 and $729,750 to qualify for the high-balance programs.  Previously, homeowners with loans within this range could only apply for Jumbo programs with dismal interest rates.

2. The Make Home Affordable Act has granted relief to homeowners who have made payments on time yet have been precluded from refinancing due to a decline in home values increasing their loan-to-value ratios above 80%.  Those fortunate enough to qualify (see previous post) can now enjoy the same sub-5.0% rates as homeowners who are still at 80% LTV or below.

3. Interest-only loans have suddenly returned for 3/1 and 5/1 ARM programs for standard conforming loans of $417,000 or less.  These programs became much of the focus and blame during the initial housing bust but remains a legitimate financing tool if the terms are properly explained and understood.  They are invaluable for homeowners with inconsistent income and help others qualify for higher mortgages because the minimum required payment is lower without any principal allocation.

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