Is it Too Late to Refinance?

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If you read through the latest mortgage market updates, you’ll see that the refinancing craze seems to be over. Dramatically low interest rates and new government programs inspired homeowners across the country to take advantage of rate and term refinancing, HARP refinancing and even cash-out refinancing for those who needed a little help paying for a major expense. But now that rates are starting to inch up slightly, has the low payment ship sailed? Not necessarily.

Those who may still benefit from refinancing include those who bought at the market’s peak, those who are underwater in their loans and those who have experienced great improvements in their credit scores or increases in their household income. If you fall into any of those categories, then the financial benefits of refinancing may still be within your reach.

If you’re one of the many Americans who paid a pretty penny for your house back when the market was at its zenith, and you haven’t yet refinanced, you may still be eligible for a lower rate and a lower monthly payment. Of course, your eligibility will depend on how much you still owe on your mortgage, your credit standing and other financial factors. Unfortunately, many of the people who bought at the market’s peak are finding themselves in a rough predicament – they have little, no or negative equity, which can often hinder your chances of getting approved for a refinance. If you owe more on your home than it’s currently worth, then you may be thinking a refinance is out of the realm of possibility.

Fortunately, for some homeowners, refinancing can still be possible, even if they’re “underwater” in their mortgage. The Home Affordable Refinance Program (HARP) was specifically designed for homeowners in this situation. The biggest restriction however, is that HARP is currently only offered to those with mortgages backed by Freddie Mac or Fannie Mae. There has been talk of a HARP version 3.0 in which the program will be available to all underwater homeowners regardless of who owns the mortgage, but as of now it’s just that – talk.

If you have a mortgage owned or serviced by Fannie/Freddie, and you have not yet taken advantage of HARP, it’s certainly worth a phone call to a HARP lender for more information.

Couple looking at home they want to purchase.


If HARP isn’t a possibility for you, don’t fret. There’s still a chance you may be eligible for a refinance, especially if your credit rating or income has improved since you took out your loan. You may be surprised just how big an impact these things can have on your chances of snagging a low interest rate. These days especially, credit scores and income levels are very important for banks in determining a borrower’s risk level. The lower your risk, the higher your chance of locking in a low rate. To find out what kind of refinance rate you may be eligible for, contact a reputable lender for a rate quote.

Refinance Lenders

Looking for a place to start when shopping for a new refi? Check out the mortgage rate tables for the advertised pricing from several different companies serving your area. In addition here are a few mortgage banks serving borrowers across the Nation you might want to consider:

  1. American Bank
    Research their refinancing options:
  2. SunTrust
    Simple Home Refi details:
  3. PNC
    Refi program info:


Once you contact a lender and have them help you explore your options, you should discuss with them what your long term homeownership goals are. If you plan on remaining in your home for a long period of time, then a simple rate and term refinance to a new 30 year fixed rate may be the best choice. If you plan on selling your home within the next five years or so, then switching to a 5/1 ARM may make more sense. With these types of loans, you get a much lower interest rate for the first 5 years, then the rate will adjust (either up or down) once per year for the remainder of the loan.

Another option would be to switch from a 30 year loan to a 15 year loan. This will most likely increase your monthly payment, but you will pay significantly less in total interest over the life of the loan. This may be a good option for those who intend to stay in their homes for a long time but would like to pay off the principal balance as soon as possible.

There are a number of different refinancing options to choose from, and every borrower’s situation is different. The wisest thing to do would be to contact a lender to discuss your options and goals. A knowledgeable mortgage advisor can help you navigate the often confusing world of home loan refinancing and offer insight into which program will best benefit you and your family.

Steph Meyer is a contributor to the Blog and keeps us up to date on interesting happenings within the world of home financing and real estate. She’s got a quick wit and keen eye on making smart financial decisions. My Google Profile+

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