If you have been waiting for Congress to pass HARP 3.0 or have been previously turned down for a refinance because of lost equity in your home, you might consider trying to refinance again.
The median price in Seattle of a house that sold in August was $457,000. With only 1.6 months of inventory on the market, and plenty of demand, we will likely see home prices in the greater Seattle area continue to trend higher.
According to Zillow’s home price index, Seattle home values are up 14.2% year over year as of August 11, 2013.
The S&P Case Shiller Home Price Index released last week also confirms that home prices are continuing to rise.
This is great news for home owners who have not been able to refinance due to loss of equity and not being able to qualify for programs like HARP 2.0, FHA or VA streamlined refinance.
How much your home will appraise for will depend on how much other homes have recently sold for in your neighborhood. Appraisers may use those homes, if they are similar to yours, as “comps” (sales comparables) to help determine a current appraised value for your home. The more recent the sale closed and how near it is in location and similarity to your home will carry the most weight to an appraiser.
Conforming mortgage programs will go up to 97% loan to value for a rate term (no cash out) refinance for a few more weeks (Fannie Mae is set to reduce maximum loan to values to 95% in mid-November).
Private mortgage insurance (pmi) will be required on loan to values over 80% and the pmi will automatically drop from the mortgage payments once the new loan’s principal balance reaches 78% of the value based on the appraised value used for the refinance with a conforming mortgage.
It’s not just Seattle home values that are trending higher, mortgage rates are too. However, if you act quickly, you may be able to lock in a rate that is still considered historically low.