Cash-Out Refinance Archives - Page 12 of 38

Apache is functioning normally

January 2, 2024 by Brett Tams

For first-time buyers — or anyone facing financial hurdles — getting an FHA loan can help make homeownership a reality. With insurance from the Federal Housing Administration, lenders can afford to offer loans with a lower down payment, lower closing costs, and less restrictive qualifying credit requirements.

But can you refinance an FHA loan? Yes, FHA loans are available for those looking to refinance an existing mortgage rather than take out a new one — whether or not that existing mortgage is itself an FHA loan. However, there are a variety of different ways to go about refinancing an FHA loan, and which is right for you will depend on your circumstances. Here’s what you need to know.

Understanding FHA Refinancing

Like any FHA loan, FHA refinancing loans are insured by the FHA — and therefore available with easier qualifying requirements and lower costs than other types of conventional loans may be. Refinancing your mortgage with an FHA refinance loan could help you save money on interest over time by scoring a lower rate, lowering your monthly payments, or even accessing cash by leveraging your home’s equity. And yes, you can refinance an FHA loan, or another type of existing home loan with an FHA refinancing loan. However, the specific FHA refinance requirements vary depending on your circumstances.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Types of FHA Loan Refinancing

There are four main options when it comes to FHA loan refinancing: Simple refinancing, Streamline refinancing, cash-out refinancing, and 203(k) refinancing. Which is right for you will depend on what kind of loan you have — and why you’re refinancing in the first place.

FHA Simple Refinance

FHA Simple refinancing is for those whose original home loan is an FHA loan. With an FHA Simple refinance, you’ll simply — as the name implies — refinance your home, using a new FHA loan to pay off the existing one, ideally with a lower monthly payment or interest rate to make it worth your while. You may also be able to switch between fixed and adjustable interest rates.

Unlike some other types of FHA refinancing, you won’t be able to access any cash using this type of refinance, so it’s not a viable option for homeowners attempting to leverage home equity to pay for other expenses. In addition, it has slightly stricter qualification requirements than FHA Streamline refinancing, which requires less credit documentation and underwriting. Although credit score requirements vary by lender, most FHA Simple refinance programs require a minimum credit score of 580.

FHA Streamline Refinance

The FHA Streamline refinancing option also follows the logic of its name: The underwriting and qualification process is less intense than other types of FHA refinancing. In addition, unlike the FHA Simple refinance option, a home appraisal is not required. You can also take out up to $500 in cash against your home equity with an FHA Streamline refinance loan.

To qualify for FHA Streamline refinancing, your original home loan will also need to be FHA insured, and payments must not be delinquent. The FHA also requires that the new loan result in a financial benefit for the borrower. Of course, you wouldn’t be going through the process and expense of refinancing if you had nothing to gain in the bargain.

FHA Cash-Out Refinance

FHA cash-out refinancing allows borrowers to leverage their home equity to take out cash that can be used for any purpose. To make this work, a new, larger loan is taken out, which is used to refinance the existing home loan — which need not be FHA insured — as well as to provide cash value.

Using an FHA cash-out refinance loan, homeowners may be able to lower their payments or interest rates while also accessing lump-sum cash that can be used for just about any purpose under the sun. Again, however, the underwriting and qualification process for FHA cash-out refinance loans may be more intense than Streamline loans — though a cash-out refi is still accessible to most borrowers with a credit score of 580 or higher and a debt-to-income ratio (DTI) of 43% or less.

FHA 203(k) Refinance

Finally, the FHA 203(k) loan, also known as rehabilitation loan, allows homeowners to take out money for the purpose of restoring, rehabilitating, or repairing their home along with purchasing it. FHA 203(k) loans can be used for an original purchase or a refinance, and homeowners with a non-FHA loan can apply for 203(k) refinancing, and may find FHA-insured rates are lower than those of other home improvement loans.
💡 Quick Tip: Lowering your monthly payments with a mortgage refinance from SoFi can help you find money to pay down other debt, build your rainy-day fund, or put more into your 401(k).

Comparing FHA Refinance vs. Conventional Loan Refinance

Why choose to refinance with an FHA loan rather than a conventional one? Or vice versa? There are pros and cons to consider either way you go. For instance, although FHA refinance loans tend to come with more accessible qualification requirements, some types are only available for those with existing FHA loans — and all of them require a mortgage insurance premium (MIP). The important thing is to consider all your options so you can make an informed decision. Let’s take a closer look.

Pros and Cons of Refinancing with an FHA Loan

While there are many benefits to refinancing with an FHA loan, there are some drawbacks to consider, too.

Pros of refinancing with an FHA loan:

• Lower interest rates and down payments than some conventional refinancing options

• Easier qualification process

• Different options available, including cash-out options

Cons of refinancing with an FHA loan:

• MIP (mortgage insurance premium) required on all FHA loans; conventional refinance loans will not require mortgage insurance if you’ve paid off at least 20% of your home’s value.

• Some types of FHA refinance loans are only available to those with existing FHA home loans.

Differences in Requirements and Benefits

In addition to the pros and cons of FHA loan refinancing, there are also differences in the requirements and benefits for FHA versus conventional home refinancing loans. For instance, in most cases, FHA loans require a minimum credit score of just 580, whereas conventional loans might have a minimum credit score starting at 620 or higher.

And while FHA loans often come with lower interest rates, they always come with a mortgage insurance requirement — whereas conventional loans may not require private mortgage insurance (PMI), if you already own at least 20% of your home’s equity.

Finally, FHA refinancing loan options may be somewhat limited, depending on your existing home loan and your motivations for refinancing. Some types of FHA refinancing loans are only available to homeowners who already have an FHA-insured mortgage, which may make them inaccessible to other borrowers.

Eligibility and FHA Refinance Requirements

So, what does it take to secure an FHA home loan? While requirements vary by lender, here are some basic rules of thumb:

Qualifying Factors for Refinancing an FHA Loan

As mentioned above, certain types of FHA refinance loans are only available to those who already have an FHA-insured mortgage loan. In addition, only FHA loans that are not delinquent — i.e., you’re up to date on your payments — may qualify for refinancing.

Credit Score Guidelines

While FHA-insured loans tend to have lower minimum credit scores than conventional refinance loans, lenders do still have a minimum. In most cases, it’s 580—though specifics may vary by lender.

Loan-to-Value Ratio (LTV)

A home’s loan-to-value (LTV) ratio refers to what percentage of the home’s current market value you’re taking out a loan for. Ideally, those who are refinancing their homes have a lower loan-to-value ratio — meaning they owe less of their home’s total value than they did when it was first purchased. Still, the LTV is one factor lenders look at when qualifying borrowers for an FHA refinance loan; the lower your LTV, the better.

Employment and Income Verification

Lenders have a vested interest in making sure you’ll be able to repay your loan, so a lender will verify your employment situation and income before qualifying you for a new loan, whether you’re taking out an original mortgage or refinancing.

Debt-to-Income Ratio (DTI)

Your debt-to-income, or DTI, ratio refers to the proportion of your available income each month that goes toward existing debts. While FHA loans have a higher maximum DTI than other types — borrowers with DTIs as high as 57% may still qualify — some lenders may choose not to qualify borrowers with a DTI of 43% or more.
💡 Quick Tip: Your parents or grandparents probably got mortgages for 30 years. But these days, you can get them for 20, 15, or 10 years — and pay less interest over the life of the loan.

Specific Requirements for Streamline Refinance

For the FHA’s Streamline refinance program, certain specific requirements apply, including:

•   The existing mortgage must also be FHA-insured.

•   The refinance must result in a “net tangible benefit” to the borrower.

•   Only up to $500 may be taken out of the loan in cash.

•   In most cases, investment properties are ineligible.

Criteria for Cash-Out Refinance

In order to qualify for an FHA cash-out refinance, you’ll need:

•   To have lived in your home for at least 12 months

•   To own at least 20% of your home’s equity

•   A minimum credit score of 580

•   A debt-to-income (DTI) ratio of 43% or lower

Benefits of Refinancing an FHA Loan

What are the specific benefits of refinancing with an FHA loan? Here are just a few of the reasons people choose to take this route when refinancing a mortgage.

Lower Interest Rate and Monthly Payment

For most homeowners, the primary motivator for refinancing is to save money — either over the long term, by scoring a lower interest rate, or on a monthly basis by choosing a loan with a lower minimum monthly payment. In some instances, you may be able to achieve both goals with the same refinancing loan, particularly if your credit history has appreciably improved since you originally took out your mortgage.

New Loan Terms

Some borrowers refinance to give themselves more time to pay off their home loan with a longer term — or to accelerate their repayment process with a shorter term.

Equity Access with a Cash-Out Refinance

For most consumers, a home is the single most valuable asset they’ll ever purchase. Being able to access the value of that equity with a cash-out refinance option is another important motivator for those seeking to refinance, and FHA refinance loans can make that goal a reality whether or not your original loan is FHA-insured.

Avoid Private Mortgage Insurance (PMI)

For borrowers looking to avoid private mortgage insurance (PMI), take heed: Although FHA loans don’t require PMI, they do require mortgage insurance. The FHA-loan version is called MIP (mortgage insurance premium), and is required on all FHA loans.

Improve Financial Stability

For some borrowers, refinancing can improve overall financial stability by achieving any of the goals listed above — for example, freeing up more discretionary income each month with a lower monthly payment.

Steps to Refinance an FHA Loan

Seriously considering an FHA refinance loan? Here are the steps it takes to turn your ideation into reality.

1. Review Your Current FHA Loan

The first step in shopping for a new loan should always be to review your existing mortgage. After all, that’s the best way to understand what factors would make a new mortgage more favorable for your finances. If your original loan is not FHA-insured, note that you may not qualify for certain types of FHA refinancing loans.

2. Shop for Lenders and Offers

Next up: The actual shopping part. In order to ensure you get the best deal available, it’s worth asking several lenders for refinancing quotes, including a full amortization schedule. That way, you’ll understand exactly how much money you stand to save — or not — by choosing a specific lender.

3. Submit an Application and Required Documentation

Once you’ve settled on a lender, you’ll submit your application, including any required documentation (such as ID and income verification, including bank statements and tax forms). In most cases, this process can be done entirely online.

4. Go Through the Appraisal and Underwriting Process

As part of most refinancing processes, you’ll need to have your home appraised so the lender understands its current market value — and can use that value to calculate important aspects of your application, like the LTV. An underwriter will assess your holistic financial profile to determine whether or not you qualify for the refinance loan.

5. Close the Refinance

Finally, if the terms are favorable and you are approved, you’ll close the refinance loan. The new lender will repay your existing loan, and your new payments will be directed toward this new lender, using the new terms you’ve agreed to.

Tips and Considerations for FHA Loan Refinancing

Want to get the very best out of your FHA loan refinancing process? Here are some tips to help you get the most bang for your buck.

Evaluate Your Financial Situation

Refinancing isn’t right for everyone. In fact, in most cases, the FHA won’t even allow you to refinance with one of its loans unless it results in a net financial benefit for you, the borrower. You can take a few first steps to determine whether or not it will help before you ever get a lender involved.

Using a mortgage calculator, you can determine how much a lower interest rate would save you over time or how much a longer loan term would reduce your monthly payment. Keep in mind that refinancing isn’t free, so unless the savings are substantial enough to eclipse your closing costs, it may make more financial sense to keep your original loan.

Understand Closing Costs and Fees

Loans come with a variety of closing costs and fees, such as application fees, the cost of the appraisal, attorney fees, and more. These costs can add up to about 6% of your overall loan value, and though some of them may be able to be financed as part of your loan, they still have the potential to eat into any savings your refinancing loan might offer.

Time Your Refinance Strategically

When it comes to refinancing your mortgage, timing matters. For example, if interest rates are higher than when you took out your original loan, the timing might not be right. The same could be said if you’re planning on moving out of your home in the near future, in which case, you may not have enough time in the home left to break even on your closing costs.

Common Mistakes in FHA Loan Refinancing

Here are some common errors borrowers make when undergoing the FHA loan refinancing process.

Misunderstanding the Eligibility Criteria

Although FHA loans come with more accessible eligibility criteria than many conventional loans, they do still have standards. If your credit score is less than 580 or your payments are delinquent, you’re unlikely to qualify for an FHA refinancing loan.

Ignoring Closing Costs and Fees

As mentioned, closing costs and fees can really add up — so if you don’t take them into account when you’re considering a refinance, you may wind up with an unpleasant case of sticker shock.

Not Considering Long-Term Financial Goals

Refinancing your home, when done best, is all about saving money over time, which means having enough time for those savings to accrue. If you’re planning on selling your house and moving in three to five years, refinancing may actually end up being more expensive than staying with a higher-rate original loan. Additionally, if you’re refinancing primarily to lower your monthly payment and make ends easier to meet, don’t forget to keep your long-term finances in mind. It may not be worth the extra monthly money to pay thousands more in interest overall.

The Takeaway

FHA refinance loans are available for homeowners whose original loans are FHA-insured—as well as for those who have a conventional original mortgage. FHA loan requirements vary depending on which type of loan you’re considering, and may not be right for everyone. But if you can meet the qualifications and derive a solid financial benefit from an FHA refinance, it may be worthwhile to embark on the process.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Can you refinance an FHA loan without an appraisal?

Yes — but only if you qualify for an FHA Streamline loan, which requires your original loan also be an FHA-insured loan.

What happens if your home’s value has decreased?

Even if your home’s value has decreased, you may still be eligible for a refinance loan through the FHA Streamline program. It all depends on how much you owe on your home and your other qualifying factors. (Keep in mind, too, that this program requires that your original home loan also be an FHA one.)

Can you refinance an FHA loan if you’re behind on payments?

No. All FHA loan refinance programs require borrowers to be up-to-date on their loan payments, with most including provisions that there must not have been any payments more than 30 days late within the last six months.

Photo credit: iStock/gremlin

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOHL1223001

Source: sofi.com

Apache is functioning normally

January 2, 2024 by Brett Tams

Our experts answer readers’ home-buying questions and write unbiased product reviews (here’s how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

Mortgage rates down for the most part this week, though current mortgage refinance rates have inched up on a few different terms compared to a week ago. But in spite of some fluctuations, rates are down dramatically from last month.

Average 30-year mortgage rates are continuing to inch down closer to 6%, and they’re currently the lowest they’ve been since spring 2023.

Most experts believe that mortgage rates will continue to go down in 2024 as the economy continues to normalize and the Federal Reserve is able to start lowering the federal funds rate.

The Fed can impact mortgage rates indirectly through changes to the federal funds rate, and the central bank has indicated it will likely start cutting this rate next year. This will take a lot of the upward pressure off of mortgage rates, allowing them to ease. After watching mortgage rates skyrocket over the last couple of years, hopeful homebuyers can finally look forward to improved mortgage affordability in the new year.

Current Mortgage Rates

Mortgage type	Average rate today

This information has been provided by
Zillow. See more
mortgage rates on Zillow

Real Estate on Zillow

Current Refinance Rates

Mortgage type	Average rate today

This information has been provided by
Zillow. See more
mortgage rates on Zillow

Real Estate on Zillow

Mortgage Calculator

Use our free mortgage calculator to see how today’s mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the entire length of your mortgage.

Mortgage Calculator

$1,161
Your estimated monthly payment

Total paid$418,177

Principal paid$275,520

Interest paid$42,657

Paying a 25% higher down payment would save you $8,916.08 on interest charges
Lowering the interest rate by 1% would save you $51,562.03
Paying an additional $500 each month would reduce the loan length by 146 months

Click “More details” for tips on how to save money on your mortgage in the long run.

Mortgage Rates for Buying a Home

30-Year Fixed Mortgage Rates Fall (-0.16%)

The current average 30-year fixed mortgage rate is 6.15%, down 16 basis points since this time last week. This rate is down significantly compared to a month ago, when it was 6.93%.

At 6.15%, you’ll pay $609 monthly toward principal and interest for every $100,000 you borrow.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.

20-Year Fixed Mortgage Rates Drop (-0.21%)

The average 20-year fixed mortgage rate is also down a bit from last week, and is sitting at 5.71%. This time last month, the rate was 6.57%.

With a 5.71% rate on a 20-year term, your monthly payment will be $700 toward principal and interest for every $100,000 borrowed.

A 20-year term isn’t as common as a 30-year or 15-year term, but plenty of mortgage lenders still offer this option.

15-Year Fixed Mortgage Rates Inch Down (-0.09%)

The average 15-year mortgage rate is 5.44%, just a few points down from from last week. It’s now much lower compared to this time last month, when it was 6.32%.

With a 5.44% rate on a 15-year term, you’ll pay $814 each month toward principal and interest for every $100,000 borrowed.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.

7/1 ARM Rates Creep Up (+0.06%)

The 7/1 adjustable mortgage rate is up six points from a week ago, currently at 6.74%. But it’s down compared to this time last month, when it was at 6.95%.

At 6.74%, your monthly payment would be $648 toward principal and interest for every $100,000 borrowed — but only for the first seven years. After that, your payment would increase or decrease annually depending on the new rate.

5/1 ARM Rates Fall Half a Percentage Point (-0.53%)

The average 5/1 ARM rate is 6.17%, a 53-point drop from last week. It’s also lower than it was a month ago, when it was 7.25%.

Here’s how a 6.17% rate would affect you for the first five years: You’d pay $611 per month toward principal and interest for every $100,000 you borrow.

30-year FHA Rates Essentially Flat (-0.02%)

The average 30-year FHA interest rate is 5.67% today, which is down just two basis points from this time last week. This rate was 6.02% a month ago.

At 5.67%, you would pay $579 monthly toward principal and interest for every $100,000 borrowed.

FHA mortgages are good choices if you don’t qualify for a conforming mortgage. You’ll need a 3.5% down payment and 580 credit score to qualify.

30-year VA Rates Go Down (-0.19%)

The current VA mortgage rate is 5.45%, 19 basis points down from this time last week. This rate was 6.11% a month ago.

With a 5.45% rate, your monthly payment would be $565 toward principal and interest for every $100,000 you borrow.

Mortgage Refinance Rates

30-Year Fixed Refinance Rates Go Up (+0.10%)

The average 30-year refinance rate is 6.33%, just 10 basis points higher than last week. But it’s down quite a bit compared to a month ago, when it was 7.17%.

Here’s how a 6.33% rate would affect your monthly payments: You’d pay $621 toward principal and interest for every $100,000 borrowed.

Refinancing into a 30-year term can land you lower monthly payments, but you’ll ultimately pay more by refinancing into a longer term.

20-Year Fixed Refinance Rates Inch Up (+0.08%)

The current 20-year fixed refinance rate is 5.89%, which is just eight basis points up compared to a week ago. This rate was 6.93% this time last month.

A 5.89% rate on a 20-year term will result in a $710 monthly payment toward principal and interest for every $100,000 you borrow.

15-Year Fixed Refinance Rates Increase (+0.26%)

The average 15-year fixed refinance rate is 6.00%, which is up 26 points compared to last week. This rate is lower compared to this time a month ago, when it was at 6.78%.

A 6.00% rate on a 15-year term means you’ll pay $844 each month toward principal and interest for every $100,000 borrowed.

Refinancing into a 15-year term can save you money in the long run, because you’ll get a lower rate and pay off your mortgage faster than you would with a 30-year term. But it could result in higher monthly payments.

7/1 ARM Refinance Rates Decrease (-0.44%)

The average 7/1 ARM refinance rate is 6.10%, down from where it was last week. A month ago, it was much higher at 7.24%.

Refinancing into a 7/1 ARM with a 6.10% rate means your monthly payment toward principal and interest will be $606 for every $100,000 you borrow. This will be the payment for the first seven years, then your rate will change annually unless you refinance again.

5/1 ARM Refinance Rates Tick Down (-0.27%)

The 5/1 ARM refinance rate is 6.30%, 27 basis points down from last week. It’s also down compared to this time last month, when it was 7.28%.

A 6.30% rate will result in a monthly payment of $619 toward principal and interest for every $100,000 borrowed. You’ll pay this amount for the first five years of your new mortgage.

30-Year FHA Refinance Rates Drop (-0.23%)

The 30-year FHA refinance rate is 5.53%, which down a bit compared to last week. This rate was 6.09% this time last month.

A 5.53% refinance rate would lead to a $570 monthly payment toward the principal and interest per $100,000 borrowed.

30-Year VA Refinance Rates Increase Very Slightly (+0.07%)

The average 30-year VA refinance rate is 5.62%, which is seven basis points higher than it was last week. This rate was 6.50% a month ago.

At 5.62%, your new monthly payment would be $575 toward principal and interest for every $100,000 you borrow.

Are Mortgage Rates Going Down?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Mortgage rates have risen throughout 2023, and they’re higher than they were in December 2022.

But rates have started trending down in recent weeks, and we should continue to see them fall in 2024 and 2025.

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease further. Check out some of our best HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.

Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.

Molly Grace

Mortgage Reporter

Source: businessinsider.com

Apache is functioning normally

December 30, 2023 by Brett Tams

Mortgage rates are holding steady this week after dropping dramatically over the past couple of months. Compared to this time last month, when average 30-year mortgage rates were still above 7%, rates are now down more than 70 basis points. And they’re down well over a full percentage point from where they were in October.

And there’s more good news: most experts believe mortgage rates will go down even more in 2024.

Mortgage rates are down in anticipation of Federal Reserve rate cuts in 2024. Though mortgage rates aren’t directly tied to Fed policy decisions, the Fed can impact mortgage rates indirectly when it makes changes to the federal funds rate. Lowering this rate next year should remove a significant amount of upward pressure off of mortgage rates and allow them to steadily trend down.

This means that more homebuyers will be able to jump back into the market after being sidelined by sky-high rates this year. But this surge in demand will likely push up home prices, limiting the amount of affordable inventory for many buyers.

Current Mortgage Rates

Mortgage type	Average rate today

This information has been provided by
Zillow. See more
mortgage rates on Zillow

Real Estate on Zillow

Current Refinance Rates

Mortgage type	Average rate today

This information has been provided by
Zillow. See more
mortgage rates on Zillow

Real Estate on Zillow

Mortgage Calculator

$1,161
Your estimated monthly payment

Total paid$418,177

Principal paid$275,520

Interest paid$42,657

Paying a 25% higher down payment would save you $8,916.08 on interest charges
Lowering the interest rate by 1% would save you $51,562.03
Paying an additional $500 each month would reduce the loan length by 146 months

Click “More details” for tips on how to save money on your mortgage in the long run.

30-year Fixed Mortgage Rates

The average 30-year fixed mortgage rate was 6.67% last week, according to Freddie Mac. This is a 28-basis-point decrease from the previous week.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates.

15-year Fixed Mortgage Rates

Last week, average 15-year mortgage rates were 5.95%, a 43-basis-point decrease from the previous week, according to Freddie Mac data.

When Will Mortgage Rates Go Down?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Rates have increased dramatically this year, though they’ve been trending back down in recent months.

As inflation comes down, mortgage rates will recede as well. We may see 30-year rates fall closer to 6% by the end of 2024.

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.

Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.

How Do Fed Rate Hikes Affect Mortgages?

The Federal Reserve has been increasing the federal funds rate this year to try to slow economic growth and get inflation under control. So far, inflation has slowed, but it’s still above the Fed’s 2% target rate.

Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy.

Fed hikes have pushed mortgage rates up over the last two years. But the Fed has indicated that it’s likely done hiking rates and could start cutting in 2024. Once the Fed cuts rates, mortgage rates should fall even further.

Molly Grace

Mortgage Reporter

Source: businessinsider.com

Apache is functioning normally

December 30, 2023 by Brett Tams

What is an FHA loan?

An FHA loan is a mortgage insured by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development. With a minimum 3.5% down payment for borrowers with a credit score of 580 or higher, FHA loans are often a good fit for first-time home buyers or people with little savings or credit challenges.

You could still qualify for an FHA loan even if you don’t meet the requirements for a conventional mortgage or if you had a bankruptcy.

The federal government doesn’t issue FHA loans, but it does insure them. That insurance protects lenders in case of default, which is why FHA lenders are willing to offer favorable terms to borrowers who might not qualify for a conventional home loan.

FHA loans are issued by private, FHA-approved lenders, including many banks, credit unions and nonbanks (a type of lender).

An FHA home loan can be used to buy or refinance numerous types of homes, including:

Specific types of FHA loans can also be used to finance new construction or renovate an existing home. However, all properties — existing or new construction — must undergo an FHA appraisal. If the property meets government standards, then you can use an FHA loan to buy (or refinance) it.

Mortgage loans from our partners

FHA vs. conventional loans

In general, it’s easier to qualify for an FHA loan than for a conventional loan, which is a mortgage that isn’t insured or guaranteed by the federal government.

Here are some key differences between FHA and conventional loans:

Credit score and history: FHA loans allow for lower credit scores than conventional loans. If you’ve had credit problems (including bankruptcy), you might find it easier to qualify for an FHA loan.
Mortgage insurance: Unlike conventional loans, all FHA loans require mortgage insurance. (However, the amount you pay varies based on the size of your down payment.) With a conventional loan, mortgage insurance generally isn’t required if you make a 20% down payment or once you reach 20% equity in your home.
Gift funds for down payments: FHA rules are more flexible regarding monetary gifts from family, employers or charitable organizations you can apply to your down payment.
FHA appraisal: To qualify for an FHA loan, the property must undergo an appraisal to make sure it meets government standards for health and safety. An FHA appraisal is different and separate from a home inspection. Conventional loans don’t require this.
Closing costs: FHA loans may involve closing costs that aren’t required by conventional loans.

FHA loan requirements

The FHA sets minimum requirements for borrowers seeking an FHA loan. However, each FHA-approved lender can determine its own underwriting standards, so long as those requirements are in line with the minimums set by the FHA. For instance, one lender may require a minimum credit score of 600 and another a minimum of 620.

Lenders each set their own interest rates and fees, too. To make sure you get the best FHA mortgage rate and loan terms, shop more than one FHA-approved lender and compare offers.

In general, here are the basic requirements to expect when applying for an FHA loan.

Mortgage loans from our partners

Credit score for FHA loans

According to the FHA, the minimum credit score for an FHA loan is 500. If your score falls between 500 and 579, you can qualify for an FHA loan, but you’ll need to make a down payment of at least 10%.

If your credit score is 580 or higher, you can qualify for a down payment as low as 3.5%.

Again, these are FHA guidelines; individual lenders can and often do opt to require a higher minimum credit score.

🤓Nerdy Tip

If your credit score doesn’t measure up, you may want to work on building your credit before you begin home shopping. When you’re ready, find a lender that specializes in FHA loans. These lenders might be more experienced at working with credit-challenged borrowers.

Debt-to-income ratio

Your debt-to-income ratio, or DTI, is a measure of your monthly debt payments in relation to your pretax income. That includes your rent or mortgage costs in addition to things like auto or student loans and credit card balances. In general, lenders view a lower DTI as more favorable when issuing loans.

DTI requirements for FHA loans differ based on your credit score and other compensating factors, such as how much cash you have in the bank. If you have a credit score from 500 to 579, the FHA generally requires a DTI of less than 43%.

It’s still possible to get an FHA loan with a DTI that’s higher than 50%, but you’ll have to meet compensating factors, and your options will be limited.

Down payments and gift funds

The minimum down payment required for an FHA loan is 3.5% if you have a credit score of 580 or higher. If you have a credit score from 500 to 579, you’ll have to put down at least 10% of the purchase price.

The good news? It doesn’t all have to come from savings. You can use gift money for your FHA down payment, so long as the donor provides a letter with their contact information, their relationship to you, the amount of the gift and a statement that no repayment is expected.

🤓Nerdy Tip

Look into state and local down payment assistance programs for first-time home buyers, usually defined as someone who has not owned a home within the past three years. You may be able to find low- or no-interest loans, or even grants, to help you pull together the cash.

FHA appraisal

The property you’re trying to buy with an FHA loan has to undergo an appraisal from an FHA-approved professional and meet FHA minimum property requirements.

The FHA appraisal is separate and different from a home inspection. The goal is to be sure the home is a good investment — in other words, worth what you’re paying for it — and ensure it meets basic safety and livability standards.

For an FHA 203(k) renovation loan, the property may undergo two appraisals: an “as is” appraisal that assesses its current state and an “after improved” appraisal estimating the value once the work is completed.

Mortgage loans from our partners

Mortgage insurance

FHA mortgage insurance is built into every loan. When you first get an FHA mortgage, you’ll make an upfront mortgage insurance payment, which can be rolled into the total amount of the loan. Then, you make monthly mortgage insurance payments thereafter. The length of your monthly payments varies based on the size of your down payment.

If your down payment is less than 10%: You will pay FHA mortgage insurance for the life of the loan.
If your down payment is 10% or more: You will pay FHA mortgage insurance for 11 years.

With a conventional loan, you can cancel private mortgage insurance once you reach 20% equity in your home. FHA mortgage insurance can’t be canceled in the same way.

🤓Nerdy Tip

Once you have enough home equity, you could choose to refinance your FHA loan into a conventional loan. This would remove the FHA mortgage insurance requirement, but you’d have to meet new qualifications and pay additional closing costs and fees.

Types of FHA loans

The FHA offers a variety of loan options, from standard purchase loans to products designed to meet highly specific needs. A full list of all FHA loan products and eligibility requirements is available at HUD.gov. Here are some common options:

Home purchase: Basic Home Mortgage 203(b)

The Basic Home Mortgage 203(b) is the standard single-family home loan backed by the FHA. Only primary residences — not vacation or second homes — qualify for FHA-insured loans.

FHA refinance loans

You may want to refinance your FHA loan to lower your interest rate, shorten your mortgage term or get cash flow for a costly project, such as a home renovation. Options include:

FHA streamline refinance: This can save you time and paperwork because it doesn’t require a new appraisal.
FHA cash-out refinance: This loan replaces your current mortgage with a new, larger loan. The difference is paid to you in cash.
FHA 203(k) refinance: This loan lets you roll the cost of repairs or renovations into the total amount of your mortgage. Upgrades must meet FHA eligibility requirements.

FHA renovation loans

FHA 203(k) rehabilitation mortgages: This option helps borrowers finance fixer-uppers by rolling purchase and renovation costs into one loan. The standard 203(k) loan lets borrowers finance improvements over $5,000. The FHA limited 203(k) loan lets borrowers finance improvements up to $35,000.
Title 1 Property Improvement Loans: These loans are also available to finance home repairs and improvements. Homeowners can obtain this loan without refinancing their existing mortgage, and the funds can be used to supplement a 203(k) loan. However, you can borrow only up to $25,000 for a single-family home.

Other specialty FHA loans

Energy-efficient mortgages: An energy-efficient mortgage can be used to finance home improvements to help a home save energy. To qualify for this financing, the home must undergo an energy assessment from a qualified professional.
Construction-to-permanent loans: This loan type helps borrowers finance the purchase of a home that’s still being built by paying the contractor in installments. When the home is finished, the loan converts to a permanent mortgage. Qualifying for these types of loans can be more difficult and time-consuming than a traditional purchase mortgage.
Manufactured homes: This includes the type sometimes called a mobile home. Manufactured homes can be bought with FHA financing, so long as everything meets HUD requirements. For example, HUD mandates that a manufactured home is at least 400 square feet, and it must be designed to use as a dwelling attached to a permanent foundation.

FHA loan limits

No matter what type of FHA loan you’re seeking, there will be limits on the mortgage amount. These limits vary by county. FHA loan limits in 2024 range from $498,257 to $1,149,825.

Low-cost county limit: The upper limit for FHA loans on single-family homes in low-cost counties is $498,257. An example is Lucas County, Ohio, where Toledo is located.
High-cost county limit: The upper limit for FHA loans in the highest-cost counties is $1,149,825, which would include mortgages in San Francisco County, California, for example.

Some counties have housing prices that fall somewhere in between, so the FHA loan limits are in the middle, too. An example is Denver County, Colorado, where the 2024 FHA loan limit is $816,500. You can visit HUD’s website to look up the FHA loan limit in any county.

How to apply for an FHA loan

Applying for an FHA loan will require personal and financial documents, including but not limited to:

A valid Social Security number.
Bank statements for, at a minimum, the past 30 days. You’ll also need to provide documentation for deposits made during that time, such as pay stubs.

Your lender may be able to automatically retrieve some required documentation, like credit reports, tax returns and employment records. Special circumstances — such as if you’re a student or you don’t have a credit score — may require additional paperwork.

Pros and cons of FHA loans

An FHA loan might be your best option for homebuying if you have credit challenges. Still, it’s important to understand the trade-offs.

Benefits of FHA loans

Lower minimum credit score requirements than conventional loans.
Down payments as low as 3.5%.
Debt-to-income ratios as high as 50% allowed (in some cases, may be higher if you meet compensating factors).

Disadvantages of FHA loans

FHA mortgage insurance lasts the full term of the loan with a down payment of less than 10%.
Property must undergo a separate appraisal and meet strict health and safety standards, which some sellers will consider an added hurdle.
No jumbo loans: The loan amount cannot exceed the conforming limit for the area.

Though the FHA sets standard requirements, FHA-approved lenders’ requirements may be different.

FHA interest rates and fees also vary by lender, so it’s important to comparison shop. Getting a mortgage preapproval from more than one lender can help you compare the total cost of the loan.

Ways to get the best FHA mortgage rates

When you’re shopping for an FHA loan, it’s smart to make sure your financials are in as good a shape as possible. This means pulling your credit reports from the three main credit reporting agencies — Experian, Equifax and TransUnion — and addressing any errors you might find. If possible, you might also pay down any larger balances, which has the added benefit of improving your debt-to-income ratio. While FHA loans might have more lenient requirements than some other loan types, having a better credit score and DTI will likely net you a better rate.

FHA loans are notable for requiring low down payments, but if you’re able to make one that’s higher than the minimum, you’ll look like a safer candidate to lenders. This is also likely to get you lower rate offers.

Once you feel confident about your application, compare mortgage rates between at least three FHA lenders. Even small differences in the rate you pay could save you — or cost you — thousands of dollars over the term of a home loan. And while you’re comparing lenders, look into first-time home buyer programs offered by your state’s housing authority. Many of these nonprofit agencies offer down payment and closing cost assistance in the form of grants.

Mortgage loans from our partners

Source: nerdwallet.com

Apache is functioning normally

December 29, 2023 by Brett Tams

After nearly two years of trudging through a frozen housing market, the consensus among mortgage professionals is that the worst of it is over.

The Federal Reserve recently signaled plans to slash interest rates three times in 2024, shifting toward the next phase in its monetary policymaking.

“It finally seems like we are turning a corner and that’s good news after two years of the Fed’s negative perspective that we’ve heard,” Max Slyusarchuk, CEO of A&D Mortgage, said in an interview.

The spread between the 30-year fixed-rate mortgage and the 10-year Treasury yield has narrowed after sitting at over 300 basis points, compared to the historic norm of 150 bps.

But how much will the decline in mortgage rates and a narrowing of the spreads breathe life into the dour origination landscape?

“At the end of the day if mortgage rates come down, I don’t just think that’s gonna solve the inventory problem right away,” said Ben Cohen, managing director at Guaranteed Rate.

“There’s still going to be a lag. So my concern is that rates are going to come down but inventory is not going to just all of a sudden be plentiful and now we’re in a situation where home prices get driven up because there is still low inventory. You have all these buyers that have been waiting for rates to come back and now they’re back and all this becomes really competitive again.”

Mortgage professionals say 2024 will be a ‘recovery year’ as markets slowly return to normal. But a combination of factors – high home prices, lack of inventory, elevated rates — temper expectations for even a moderately strong year.

HousingWire interviewed a dozen loan officers and mortgage executives about their strategies for 2024, which mortgage products they expect to be in demand, and the magic rate needed to get sellers and buyers back in the market.

Strategies for 2024

I’m heavily focused on recruiting, improving technology and marketing, empowering the loan officers — by giving them the same technology and marketing support. Whatever I have for me, I will do it for them as well. This way I can help them grow their business.

We will use AI to help with customer service. AI can understand the loan status, a loan profile and AI can respond to the consumer. If they want to know what’s going on with rates, their loan, AI can give them an answer.

The second project I’m working on is having a mobile app where the the client can download the app and use it to take care of their transaction. We are going to shift to using a mobile app so we don’t have to use phone calls, emails and text messages anymore.

— Thuan Nguyen, CEO of Loan Factory, Inc.

A lot of what you hear is very cliche-ish. You have to make more calls, got to call on more people — all that is true.

But I think it’s more complex than that.

A successful loan officer in this market needs a very capable qualified assistant. I think they need to have all systems firing, meaning they’ve got to do the traditional stuff where you’re doing broker open houses, you’re going to open houses, you are doing coffee clutches and breakfasts and all that.

Simultaneous to that, I think you got to be heavily engaged in what I call the ‘virtual war’ and that means you’re driving your social media and you’re in your your subscribing to systems that drive alerts to your database’s activity. And then you have to have a process in a system to manage those alerts and have outreach to those alerts to where you’re capitalizing on them in a quick time.

— John Palmiotto, chief production officer at The Money Store

What people who don’t understand marketing have done is unintentional marketing. They’re just doing what they see everybody else doing and what we’re finding is those who are succeeding today and are going to thrive in 2024 have a lot of intention in their social media.

It’s not social media, it’s social networking. Networking has always been a key component to drive growth and fostering true community with your referral partners and your sphere of influence. So you have to be intentional, you have to be very strategic – understanding the audience that you’re going after and leveraging it as a social networking platform.

— Shane Kidwell, CEO of Dwell Mortgage

We’re now having to put in work every day without necessarily reaping the immediate reward. Staying disciplined to putting in the effort every single day at the absolute highest level even though we’re not going to see the immediate reward.

We’re laying the constant groundwork word doing the agent training. We’re doing it to where some of that is not reaping us rewards here. It’s that type of mindset that we have to have, because luck is hard work meeting opportunity.

— Matt Weaver, VP of mortgage sales at CrossCountry Mortgage

I recently got licensed in the state of Ohio because that’s where I’m from. I have a lot of connections in Ohio. I’m comfortable with lending there because I know I’m very familiar with the area. I think a lot of my friends and family members and circle of influence up there are going to be refinancing in the next six, 12, 18 months and I want to be licensed and ready to go when that time comes so that I can help them.

— Justin McCrone, loan officer at Atlantic Coast Financial Services

Origination goals

I would be happy with doing $65 million to $75 million next year. I left and joined Revolution in 2023 for a couple months with no origination, I’m probably gonna hover around $50 million this year, whereas I did $100 million in 2022 at Guaranteed Rate.

— Larry Steinway, senior vice president of mortgage lending and branch manager of Revolution Mortgage

The Mortgage Bankers Association (MBA) has a report on where they think the business is going, you have Fannie Mae on where they think the business is going. We look at all that and then we look at the size of the sales team, who we’ve recruited, what we think how much business will pick up.

I think the first quarter is going to be tough. And I think it’ll pick up once you get past the first quarter spring market and on. So we’re planning for a 20% increase.

— Jon Overfelt, director of sales and principal at American Security Mortgage Corp.

I think I’m doing marginally better than this year. We’re now looking at a declining rate environment versus the rising rate environment. So that will allow people to be more optimistic. I would imagine we’ll be about 10 to 15% better next year than this year.

— Robby Oakes, managing director at CIMG Residential Mortgage

Popular products

Given the rate cycle over the past two years and the record level of available home equity that consumers are sitting on, the second mortgage market is a huge opportunity for originators to serve the cash-out and debt consolidation needs of their clients without touching their low rate first mortgage, make much needed origination income and keep the client close so they can service them again in the next cycle. Home equity is really a no-brainer today.

Non-QM is also a huge opportunity for originators to serve the needs of their clients and make much needed origination income. Originators will be battling it out again next year for purchase and refinance volume again that fall into the standard agency, government, jumbo buckets. The rate and term and cash-out refinance market will rely on rates decreasing, but even if they move to 6% next year, the industry will struggle with refinances.

— Paul Saurbier, SVP of strategy at Spring EQ

There’s a big push for home affordability. So there’s a lot of programs out there for first-time homebuyers based on where they’re actually buying their home and what their income is. There’s incentives for those people to get into the home a little bit cheaper than who’s already been a homeowner and can’t take advantage of those programs.

So to me, it’s still a big first-time buyer market in 2024. I’m not saying there are people that are existing but the people that are existing homeowners are only going to move if they absolutely have to move.

–Ben Cohen, managing director at Guaranteed Rate

I think for sure the non-QMs – the more flexible guideline programs are going to continue to be big, especially for people who are investors or self-employed aging populations.

Obviously for people with good credit, good income, solid assets, the 30-year fixed conventional mortgages is the most amazing program that exists for consumers because you don’t have any risk if rates go up and if rates go down you get to refinance and get a lower rate.

I don’t know if it’s national, but 30% of deals right [in my market in California] now are all-cash and so competing against all-cash is still going to be a concern for folks. So that means our job is not only to get them educated on their loan options, but also to make sure we are solid so we get fully underwritten files, making sure we do a lot of work on the front-end so we’re not missing out on deals.

— Brady Thomas, branch manager at American Pacific Mortgage

Home equity products will continue to be attractive options for homeowners looking for specific needs. Based on the goals of the homeowner, Adjustable Rate Mortgages (ARMs) may offer some flexibility. As rates start to tick down throughout 2024, traditional refinances will begin to make more financial sense, as well.

— Michael Merritt, SVP of customer care and default mortgage servicing at BOK Financial

Magic rate?

I would say 5.5%. But the issue is home prices are too high. In order to have the market return to normal, they have to come down a lot more. If rates and prices both come down, it’s easier. But this time, the price might not come down so we have to rely on the rates.

— Thuan Nguyen – CEO of Loan Factory, Inc.

When we get rates in the 5%, I think it’s gonna be fun to be in this business again because people will be willing to leave their 3% interest rate. I think we are going to see (traditional) refinancing transactions really start to kick in in the second half of 2024, 2025.

— Larry Steinway, senior vice president of mortgage lending and branch manager of Revolution Mortgage

I think if we get rates to come down into the 5% range, that’s going to help quite a bit. If people got rates of 7% and 7.5% and they can get a rate at 5%, that’s a refi boom for all of those buyers.

I think rates in the 5%-range or low 6% levels will bring buyers back to the market, but I don’t think we would get a ton of sellers until we have rates in the 4% or low 5%. Somebody who might want to move because they need an extra bedroom or want a bigger backyard won’t move if rates are still at 6% and they’re going from a rate of 3%. But they might do it if they’re getting 4.5%.

— Brady Thomas, branch manager at American Pacific Mortgage

Business was really busy when they were in the low 6% range and the high 5% levels. If you look back earlier in the year when we had the banking crisis hit, business picked up a lot then and that’s about where rates were – in the high 5%, low 6%. I think somewhere in there, you would see a pretty good pickup.

— Jon Overfelt, director of sales and principal at American Security Mortgage Corp.

The question people should be asking is at what rate threshold will sellers come back into the market. Given the average mortgage rate is 3.7%, and considering the pent-up deferred sales pressure is growing each day, our view is that somewhere around 5.5% will be a key threshold to attract sellers in a way that brings supply-demand parity into closer balance.

— Jack Macdowell, chief investment officer at Palisades Group

The number will be different based on the goal of the customer. If customers are looking for home improvement, debt consolidation or other spending goals, Home equity products can be positive at current rates. As rates work back towards 6%, I think you will begin to see more refinance options open up.

— Michael Merritt, SVP of customer care and default mortgage servicing at BOK Financial

Our definition of a magic number indicates the rate at which more than half of the buyers are willing to buy. We have an analytical department that analyzes the purchasing power of the U.S. in the past 40 years and they are saying it’s 6.25%. At 6.25%, a majority of people would say, ‘I’m OK to buy.’ That’s when supply and demand will equalize and your property is not going to drop or rise in value.

— Max Slyusarchuk, CEO of A&D Mortgage

Source: housingwire.com

Apache is functioning normally

December 29, 2023 by Brett Tams

Besides the high level of investor transactions and the growing appeal of non-QM, changing demographics also boded well for Deephaven, Davis suggested. In describing the scene, he ticked off an impressive array of statistics from memory. “In the United States, there’s close to 20 million people that are self-employed – a testament to a very … [Read more…]

Apache is functioning normally

December 28, 2023 by Brett Tams

The average rate for a 15-year fixed-rate refinance saw growth this week, while 30-year fixed refinance rates slumped. The average rate on 10-year fixed refinance shrank.

30-year fixed refinance: 7.00%
15-year fixed refinance: 6.36%
10-year fixed refinance: 6.07%

Mortgage rates have been dropping since early November but remain relatively high, so millions of homeowners are staying put until rates ease more. But with the Federal Reserve taking its third consecutive pause from its aggressive rate-hike policy and promising three rate cuts throughout 2024, the opportunity to refinance might come sooner rather than later.

That’s especially true for homeowners who bought homes with rates near or above 8%. “The best bet there is to keep an eye on day-to-day rate changes and have a game plan on how to capitalize on a big enough drop,” said Matt Graham of Mortgage News Daily.

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.

Today’s refinance rates

In today’s high-rate environment, refinancing is less attractive. Rates are currently between 6% and 7%, but your personal interest rate will depend on your credit history, financial profile and application.

Here are the average refinance rates provided by lenders across the US. We track refinance rate trends using data collected by Bankrate:

Today’s refinance interest rates

Product	Rate	A week ago	Change
30-year fixed refi	7.16%	7.17%	-0.01
15-year fixed refi	6.36%	6.34%	+0.02
10-year fixed refi	6.07%	6.13%	-0.06

Rates as of December 27, 2023.

What does it mean to refinance?

When you refinance your mortgage, you take out another home loan that pays off your initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you’ll tap into your equity with a new loan that’s bigger than your existing mortgage balance, allowing you to pocket the difference in cash.

Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it’s the right choice for you. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly. But today’s mortgage market conditions aren’t ideal. If you decide to refinance, compare rates, fees and the annual percentage rate — which reflects the total cost of borrowing — from different lenders to find the best deal.

30-year fixed-rate refinance

For 30-year fixed refinances, the average rate is currently at 7.16%, a decrease of 1 basis point from what we saw one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.

15-year fixed-rate refinance

For 15-year fixed refinances, the average rate is currently at 6.36%, an increase of 2 basis points from what we saw the previous week. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.

10-year fixed-rate refinance

For 10-year fixed refinances, the average rate is currently at 6.07%, a decrease of 6 basis points over last week. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment.

What is influencing the direction of refinance rates?

When mortgage rates hit historic lows during the pandemic, there was a refinancing boom, as homeowners nabbed lower interest rates on their home loans. But with current rates, refinancing might not actually save you money.

Though refinancing activity has picked up recently, the overall level of refinance applications is still very low compared to early 2021. Mortgage rates are expected to go down throughout 2024.

Reasons to refinance

Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:

To get a lower interest rate: If you can secure a rate that’s at least 1% lower than the one on your current mortgage, it could make sense to refinance.
To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage.
To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run.
To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense.
To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.

How to find the best refinance rate

The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application. Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to speak with multiple lenders and shop around.

Refinancing can be a great move if you get a good rate or can pay off your loan sooner, but consider whether it’s the right choice for you at the moment.

Source: cnet.com

Apache is functioning normally

December 27, 2023 by Brett Tams

Both 15-year fixed and 30-year fixed refinances saw their mean rates slump this week. The average rates for 10-year fixed refinances also slumped.

30-year fixed refinance: 7.01%
15-year fixed refinance: 6.36%
10-year fixed refinance: 6.09%

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.

Refinance rates for homeowners

Here are the average refinance rates provided by lenders across the US. We track refinance rate trends using data collected by Bankrate:

Today’s refinance rates

Product	Rate	A week ago	Change
30-year fixed refi	7.17%	7.21%	-0.04
15-year fixed refi	6.36%	6.45%	-0.09
10-year fixed refi	6.09%	6.20%	-0.11

Rates as of December 26, 2023.

What does it mean to refinance?

30-year fixed-rate refinance

The average 30-year fixed refinance rate right now is 7.17%, a decrease of 4 basis points from what we saw one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.

15-year fixed-rate refinance

For 15-year fixed refinances, the average rate is currently at 6.36%, a decrease of 9 basis points over last week. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.

10-year fixed-rate refinance

The current average interest rate for a 10-year refinance is 6.09%, a decrease of 11 basis points from what we saw the previous week. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment.

What is influencing the direction of refinance rates?

Though refinancing activity has picked up recently, the overall level of refinance applications is still very low compared to early 2021. Mortgage rates are expected to go down throughout 2024.

When to consider a mortgage refinance

Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:

To get a lower interest rate: If you can secure a rate that’s at least 1% lower than the one on your current mortgage, it could make sense to refinance.
To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage.
To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run.
To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense.
To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.

How to find personalized refinance rates

Refinancing can be a great move if you get a good rate or can pay off your loan sooner, but consider whether it’s the right choice for you at the moment.

Source: cnet.com

Apache is functioning normally

December 26, 2023 by Brett Tams

The residential mortgage as we know it today is less than a century old. In fact, until the Federal Housing Administration (FHA) was founded in 1934, only one in 10 Americans even owned a home: It was a luxury available only for cash or with a very short-term loan. That all changed with the development of the 30-year fixed-rate mortgage during the Great Depression, and the perfection of it after World War II. Essentially a way to buy a house on the installment plan, it made homeownership possible for millions, and solidified homeownership as a key part of the American Dream.

With the development of the 30-year mortgage came another great American pastime: the watching of mortgage interest rates. When shopping for a home loan, it can be helpful to understand the history of mortgage rate trends in America. Here we’ll break down the past 50-plus years of mortgage trends.

Current and historical mortgage rates

1970s mortgage rate trends

The 30-year fixed-rate mortgage — now the most popular type of home loan — started off the decade at about 7.3 percent in 1971, according to Freddie Mac’s survey. By the end of 1979, the 30-year rate was at 12.9 percent. During this decade, the Federal Reserve’s expansionary policy and other factors helped drive inflation and borrowing costs way up.

1980s mortgage rate trends

At the beginning of 1980, homes in the U.S. cost a median $63,700, according to the Department of Housing and Urban Development (HUD). By 1990, that median had risen to $123,900. Spurred by the Great Inflation, the 30-year fixed mortgage rate reached a pinnacle of 18.4 percent in October 1981, according to Freddie Mac. Once the Fed reined in inflation, the 30-year rate seesawed down to the 9 percent range, closing the decade at 9.78 percent.

1990s mortgage rate trends

The 1990s saw a dramatic shift in the 30-year rate, which plunged to an average of 6.91 percent in 1998, according to Bankrate data. This drop was brought on by the dot-com bubble, an era when investors rushed to buy stocks from technology companies that were overvalued. When these stocks plummeted, investors turned their focus to fixed-income investments, such as bonds. As bond prices rose and yields fell, mortgage rates, which follow the 10-year Treasury’s yield, also declined.

2000s mortgage rate trends

The 30-year rate took another tumble in the latter half of the 2000s when the housing market crashed due to the prevalence of subprime loans. The average 30-year fixed mortgage rate dropped from about 8 percent at the start of the decade down to 5.4 percent by 2009, according to Bankrate data. At this time, the Federal Reserve implemented quantitative easing measures, buying mortgage bonds in bulk to drive down interest rates and usher in an economic recovery.

2010s mortgage rate trends

In the 2010s, the 30-year mortgage rate continued to trend downward, beginning in the 4 percent range, dipping under the 4 percent mark and then ending the decade back in that range, according to Bankrate data. These rates were brought on in part by the Federal Reserve’s pull-back on bond-buying.

2020s mortgage rate trends

2020 saw new lows for mortgage rates, with the 30-year fixed rate diving to just under 3 percent, according to Bankrate data, and averaging 3.38 percent for the year. Amid the pandemic, fearful investors were attracted to safer products such as Treasury and mortgage bonds, pushing yields — and rates — lower.

Rates began to creep back up in 2021, but the ongoing pandemic ultimately tempered their rise.

Then came 2022 and 2023. Determined to curb rampant inflation, the Federal Reserve began raising its benchmark interest rate, and mortgage rates followed suit. In October 2022, the 30-year rate breached 7 percent, but settled back into the 6 percent range for the first half of 2023. In July 2023, rates reversed course. The 30-year peaked above 8 percent on October 25, before drifting back down to 7.21 percent on December 13.

Will mortgage rates continue dropping?

While we can try to guess based on historical data, no one knows for certain what will happen to mortgage rates — whether they’ll change at all, or when. The economy and housing market are cyclical, experiencing ups and downs, at times unpredictably.

That said, we regularly ask economists and other experts to weigh in. For week-to-week predictions, check out our mortgage rate poll. For a monthly look-ahead, read our latest mortgage rate forecast.

Summary: Historical mortgage rates over time

Over the last 50 years, mortgage rates have reached both peaks and valleys, from the high of 18 percent in the 1980s to today’s relatively moderate, but somewhat volatile figures. You can view and follow current 30-year mortgage rates on Bankrate.

Below is a summary of the average 30-year fixed mortgage rate by year. From the mid-1980s on, the numbers reflect Bankrate’s calculation of the effective mortgage rate, which takes into account the average number of points borrowers pay. The data from the 1970s to the early 1980s is based on Freddie Mac’s reporting.

Year	30-year fixed-rate average
Sources: Bankrate, Freddie Mac
2023	7.00%
2022	5.53%
2021	3.15%
2020	3.38%
2019	4.13%
2018	4.70%
2017	4.14%
2016	3.79%
2015	3.99%
2014	4.31%
2013	4.16%
2012	3.88%
2011	4.65%
2010	4.86%
2009	5.38%
2008	6.23%
2007	6.40%
2006	6.47%
2005	5.93%
2004	5.88%
2003	5.89%
2002	6.57%
2001	7.01%
2000	8.08%
1999	7.46%
1998	6.91%
1997	7.57%
1996	7.76%
1995	7.86%
1994	8.28%
1993	7.17%
1992	8.27%
1991	9.09%
1990	9.97%
1989	10.25%
1988	10.38%
1987	10.40%
1986	10.39%
1985	12.43%
1984	13.88%
1983	13.24%
1982	16.04%
1981	16.64%
1980	13.74%
1979	11.20%
1978	9.64%
1977	8.85%
1976	8.87%
1975	9.05%
1974	9.19%
1973	8.04%
1972	7.38%

How historical mortgage rates affect buying a home

Broadly speaking, lower mortgage rates fuel demand among homebuyers and can increase an individual’s buying power. A higher rate, on the other hand, means higher monthly mortgage payments, which can be a barrier for a buyer if the cost becomes unaffordable. In general, a borrower with a higher credit score, stable income and a sizable down payment qualifies for the lowest rates.

While you should keep an eye on mortgage rates, don’t try to time the market or predict what’ll happen. While a home is an investment, it’s also where you live. In general, it’s best to get a mortgage when the time is right for you.

How historical mortgage rates affect refinancing

When mortgage rates are on the upswing, it might make less financial sense to try to refinance. Generally, it’s best to refinance if you can shave off one-half to three-quarters of a percentage point from your current interest rate, and if you plan to stay in your home for a longer period of time. If you plan to sell your home soon, the cost to refinance might not be worth it.

Many homeowners, however, are sitting on higher levels of equity, so consider exploring a cash-out refinance. Shop around to find the lowest possible rate and fees based on your credit and finances, and be sure to lock your rate.

Source: bankrate.com

Apache is functioning normally

December 25, 2023 by Brett Tams

If you’ve served in the military and need a mortgage, then a VA loan might be right for you, whether you’re buying a home or refinancing. Here’s what to know.

What is a VA home loan?

A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs and issued by a private lender, such as a bank, credit union or mortgage company. A VA loan can make it easier to buy a home because it typically doesn’t require a down payment.

Only qualified U.S. veterans, active-duty military personnel and some surviving spouses are eligible for VA loans. The 1944 GI Bill of Rights established the VA home loan program to help veterans get a foothold in civilian life after World War II.

You might find it helpful to go with a lender and a real estate agent who have experience working with VA borrowers. The home will be subject to a VA appraisal, and an experienced agent will help you avoid homes that won’t meet the minimum required standards.

How does a VA home loan work?

The VA’s guarantee means the government will repay the lender a portion of a VA loan if the borrower doesn’t make payments. This assurance reduces the risk for lenders, which makes it possible for them to offer favorable terms and require no down payment.

VA loan rates are typically lower than offers you’d find for conventional loans. The rate could be fixed, meaning payments will remain the same, or adjustable, meaning that payments could change over time. Adjustable-rate mortgages (ARMs) come with some risk, as you’ll pay more if rates rise.

If eligible, you can complete the VA mortgage application process through a lender of your choice. Many (but not all) lenders offer VA loans, and some lenders specialize in serving VA loan borrowers. It’s a good idea to apply with multiple lenders in order to compare rate offers.

Mortgage loans from our partners

VA home loan eligibility

You’re an active-duty military member or veteran who meets length-of-service requirements (90 days of service during wartime or 181 days of service during peacetime).
You served in the National Guard or Reserve for at least six years, or served 90 days (with at least 30 of them being consecutive) in active duty under Title 32 orders.
You’re the surviving spouse of a service member who died while on active duty or from a service-connected disability and you have not remarried. Surviving spouses can retain eligibility if they remarried after the age of 57 and after Dec. 16, 2003. Spouses of prisoners of war or service members missing in action are also eligible.
You meet the lender’s requirements for credit and income. The VA doesn’t set a minimum credit score for VA loans, but lenders can set their own minimum standards. The lender will also consider your income and debts to evaluate your ability to repay the mortgage.
The property you want to buy meets safety standards and building codes and will be your primary residence. Borrowers are typically required to occupy the residence within 60 days, though this may be extended to 12 months under certain circumstances.

How to apply for a VA home loan

Obtain a certificate of eligibility: A VA certificate of eligibility shows a mortgage lender that your military service meets the requirements for a VA loan. A VA-approved lender can obtain the document for you, which is needed before the loan can close. You can also request the certificate from the VA online or by mail.

Find the right lender: Some VA lenders consider borrowers with lower credit, while others offer a larger variety of VA loan types. Get preapproved with more than one VA mortgage lender to compare their qualification requirements and mortgage rates. Preapproval is nonbinding, but it will give you an idea of what kind of mortgage you qualify for and how much you may be eligible to borrow. Getting preapproved also shows sellers that you are motivated to buy and can qualify for a mortgage.

Find a home: An experienced real estate agent can help you find a home that meets minimum property requirements regarding cleanliness, safety and structural soundness. After you work with your agent to make an offer, the mortgage lender will evaluate your finances and order a VA appraisal to make sure the home meets all the requirements. If your application and appraisal are approved, the final steps are to close on the loan and move into the house. The application process will be essentially the same as when you applied for preapproval, except now you’ll be applying with a specific property in mind.

Pros and cons of VA home loans

Like any type of loan, VA loans have their advantages and disadvantages. Borrowers who may benefit from a VA loan will have to contend with specific fees and eligibility requirements in exchange for features like low rates and no minimum down payment requirements.

Pros

No down payment or mortgage insurance required. Other loan types require down payments and can include an extra cost for mortgage insurance. FHA loans require mortgage insurance regardless of the down payment amount, and conventional loans usually require mortgage insurance if the down payment is less than 20%.
Lower rates. VA loans usually have lower rates than conventional mortgages.
Limited closing costs. Closing costs are the various fees and expenses you pay to get a mortgage. The Department of Veterans Affairs limits the lender’s origination fee to no more than 1% of the loan amount and prohibits lenders from charging some other closing costs.
VA loans can be assumed. This means that when you’re ready to sell your home, you have the option of allowing the buyer to take over your existing mortgage. This can be a selling point if your rate is lower than the current average mortgage rate.

Cons

VA loan funding fee. Although VA loans don’t require mortgage insurance, they come with an extra cost called a funding fee. The fee is set by the federal government and covers the cost of foreclosing if a borrower defaults. As of April 7, 2023, the fee ranges from 1.25% to 3.3% of the loan, depending on your down payment and whether it’s your first VA loan. You can pay the fee upfront or fold it into the loan.
Purchase loans are only for primary homes. You can’t use a VA loan to buy an investment property or a vacation home.
Not all properties are eligible. A VA-approved appraiser will evaluate the home you want to buy to estimate the value and make sure it meets minimum property requirements. Some fixer-uppers may not meet the VA’s minimum standards.

What is the VA loan limit?

The VA loan limit is the maximum amount you can borrow without having to make a down payment. In 2020, limits were eliminated for current members of the military and veterans who have access to their full VA loan entitlement. However, loan limits still apply to borrowers who already have a VA loan or have defaulted on a VA loan.

In 2024, the standard VA loan limit is $766,550 for a single-family home in a typical U.S. county, but it can run as high as $1,149,825 in high-cost areas. It’s possible to get a VA loan even if the home price exceeds the county limit, but you’ll be required to make a down payment. You can use NerdWallet’s search tool below to find the loan limit for your county.

Refinancing a VA home loan

You can refinance an existing VA loan with a standard (also called a “streamline”) refinance loan. This is formally called a VA Interest Rate Reduction Refinance Loan (VA IRRRL). Just as it sounds, the intention behind these loans is to change the rate of your VA loan, either by qualifying for a lower rate or by switching from an adjustable rate to a fixed rate.

Borrowers who want to access some of their equity or who want to convert their conventional mortgage to a VA loan may be interested in a VA cash-out refinance. This would involve taking on a larger loan, paying off your original mortgage, and pocketing the difference. It’s typically recommended that you use this extracted equity to finance wealth-building expenses, like renovations or repairs to the home.

Types of VA home loans

The VA loan program offers a variety of options, including purchase and refinance mortgages, rehab and renovation loans and the Native American Direct Loan. Here’s an overview.

How many times can you use a VA home loan?

Getting a VA loan isn’t a one-time deal. After using a VA mortgage to purchase a home, you can get another VA loan if:

You sell the house and pay off the VA loan.
You sell the house, and a qualified veteran buyer agrees to assume the VA loan.
You repay the VA loan in full and keep the house. Just once, you can get another VA loan to purchase an additional home as your primary residence.

Mortgage loans from our partners

Frequently asked questions

What is a VA loan and how does it work?

A VA home loan is backed by the Department of Veterans Affairs, and it offers competitive interest rates with no minimum down payment. They’re offered by lenders such as banks, credit unions and mortgage companies to borrowers who meet the VA’s qualifications. These criteria include length-of-service requirements (with separate requirements for surviving spouses) and minimum standards for property. The lender will also have its own financial requirements, such as a minimum credit score and a maximum amount of existing debts.

How much does a VA loan let you borrow?

The maximum amount that you can borrow with a VA loan comes down to how much your lender is willing to approve. However, there is a ceiling for how much you can borrow with a 0% down payment if you already have an active VA loan or if you defaulted on a VA loan in the past. This figure is $766,550 in most areas and $1,149,825 in high-cost areas.

What is the minimum credit score for a VA loan?

There is no minimum credit score required by the Department of Veterans Affairs. However, individual lenders will have their own qualifying criteria. Borrowers with credit scores of 620 or higher will have an easier time getting approved.

Source: nerdwallet.com

Understanding FHA Refinancing

First-time homebuyers canprequalify for a SoFi mortgage loan,with as little as 3% down.

Types of FHA Loan Refinancing

FHA Simple Refinance

FHA Streamline Refinance

FHA Cash-Out Refinance

FHA 203(k) Refinance

Comparing FHA Refinance vs. Conventional Loan Refinance

Pros and Cons of Refinancing with an FHA Loan

Differences in Requirements and Benefits

Eligibility and FHA Refinance Requirements

Qualifying Factors for Refinancing an FHA Loan

Credit Score Guidelines

Loan-to-Value Ratio (LTV)

Employment and Income Verification

Debt-to-Income Ratio (DTI)

Criteria for Cash-Out Refinance In order to qualify for an FHA cash-out refinance, you’ll need: • To have lived in your home for at least 12 months • To own at least 20% of your home’s equity • A minimum credit score of 580 • A debt-to-income (DTI) ratio of 43% or lower

Benefits of Refinancing an FHA Loan

Lower Interest Rate and Monthly Payment

New Loan Terms

Equity Access with a Cash-Out Refinance

Avoid Private Mortgage Insurance (PMI)

Improve Financial Stability

Steps to Refinance an FHA Loan

1. Review Your Current FHA Loan

2. Shop for Lenders and Offers

3. Submit an Application and Required Documentation

4. Go Through the Appraisal and Underwriting Process

5. Close the Refinance

Tips and Considerations for FHA Loan Refinancing

Evaluate Your Financial Situation

Understand Closing Costs and Fees

Time Your Refinance Strategically

Common Mistakes in FHA Loan Refinancing

Misunderstanding the Eligibility Criteria

Ignoring Closing Costs and Fees

Not Considering Long-Term Financial Goals

The Takeaway

FAQ

Can you refinance an FHA loan without an appraisal?

What happens if your home’s value has decreased?

Can you refinance an FHA loan if you’re behind on payments?

Current Mortgage Rates

Current Refinance Rates

Mortgage Calculator

Mortgage Calculator

Mortgage Rates for Buying a Home

30-Year Fixed Mortgage Rates Fall (-0.16%)

20-Year Fixed Mortgage Rates Drop (-0.21%)

15-Year Fixed Mortgage Rates Inch Down (-0.09%)

7/1 ARM Rates Creep Up (+0.06%)

5/1 ARM Rates Fall Half a Percentage Point (-0.53%)

30-year FHA Rates Essentially Flat (-0.02%)

30-year VA Rates Go Down (-0.19%)

Mortgage Refinance Rates

30-Year Fixed Refinance Rates Go Up (+0.10%)

20-Year Fixed Refinance Rates Inch Up (+0.08%)

15-Year Fixed Refinance Rates Increase (+0.26%)

7/1 ARM Refinance Rates Decrease (-0.44%)

5/1 ARM Refinance Rates Tick Down (-0.27%)

30-Year FHA Refinance Rates Drop (-0.23%)

30-Year VA Refinance Rates Increase Very Slightly (+0.07%)

Are Mortgage Rates Going Down?

Current Mortgage Rates

Current Refinance Rates

Mortgage Calculator

Mortgage Calculator

30-year Fixed Mortgage Rates

15-year Fixed Mortgage Rates

When Will Mortgage Rates Go Down?

How Do Fed Rate Hikes Affect Mortgages?

What is an FHA loan?

FHA vs. conventional loans

FHA loan requirements

Credit score for FHA loans

Debt-to-income ratio

Down payments and gift funds

FHA appraisal

Mortgage insurance

Types of FHA loans

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Criteria for Cash-Out Refinance

In order to qualify for an FHA cash-out refinance, you’ll need:

• To have lived in your home for at least 12 months

• To own at least 20% of your home’s equity

• A minimum credit score of 580

• A debt-to-income (DTI) ratio of 43% or lower