August 23, 2012 – CBS 2 News at 5AM
While you were enjoying your summer, you may have missed htat mortgage rates have been creeping higher in the past month.
But don’t let that deter you, according to Jill Schlesinger, Editor-at-Large of CBS MoneyWatch.com.
What’s going on with rates and why are they higher?
As economic data has improved, interest rates have increased, but mortgage rates are about a half a point LOWER from a year ago. 30-year fixed-rate mortgages averaged 3.86 percent; 15-years are 3.15 percent and rates on 5-year adjustable-rate mortgages averaged 2.74 percent.
What about homeowners who don’t have enough equity to refinance?
Check out the government’s second version of the home affordable refinance program, or “HARP”. This version allows homeowners who are “underwater” on their mortgages to refinance. But you must be current on payments for the last 12 months to qualify. Also your current mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae or have been sold to the entities on or before May 31, 2009.
What else should everyone know before refinancing?
Prepare for a long and painful process where you will be asked to produce tons of documents, sometimes two or three times, so have patience. Check your credit scores before applying – you can get reports from all three agencies free of charge at annualcreditreport.com and if there are any problems, correct them before you start. Finally, with all of the talk about the debt and deficit, the mortgage tax deduction is no longer a sure thing, so you may want to factor that in when determining whether or not to refinance. On MoneyWatch.com, we have more information about the HARP plan, so check it out!