For San Jose homeowners, this summer has brought some of the best home loan rates on record. If you’ve been wondering whether you could benefit from today’s low rate environment, read on. There are two programs that may help you.

What about My Home’s Value?

Not only were San Jose home loan rates at their lowest in August, we also learned last month that home prices continued to climb nationally since reaching a bottom in the first quarter of 2009. According to the S&P/Case-Schiller Index, home prices in both their 10 and 20 cities composite have increased 16 straight months.

While it’s great news that values have risen over the last year, there is concern that the increases are decelerating and that price declines are on the horizon in 2011.

So, even though your San Jose property may not be worth what it was at the peak of the market, the odds are great that its value has increased since bottoming out last year. That increase could be enough to help you get that loan program and rate you want. For some though, even with that increase, your home’s value may still be lower than what you thought you needed to get a new loan.

Why Wait?

Why have some people waited to or chosen not to refinance their San Jose Homes? One reason is the value of their home. As home values have fallen in the past few years, many homeowners believe that obtaining new financing, especially without substantial new costs or private mortgage insurance (PMI), is impossible. For a lot of homeowners though, this is not the case.

We will address two loan programs available that could help you even if you happen to fall in this camp.

San Jose FHA Streamline Refinance:

If the existing home loan you have is one that was guaranteed by the FHA, you may be able to refinance without an appraisal, even if the value of your home is less than what you currently owe on your loan.

With a San Jose FHA Streamline Refinance, homeowners can refinance their existing FHA loan without an appraisal and in many cases, also with reduced documentation requirements. This can bring a lot of relief to someone’s interest rate and mortgage payment without much fuss.

In doing an FHA Streamline Refinance without an appraisal, you can refinance your loan but you may have to bring some money to the closing table. Closing costs may not be added to your existing loan when an appraisal is not required. In a lot of situations, the amount required will be similar to a normal monthly mortgage payment.

If you do not have the funds available to cover all the costs, you may be able to work with your lender to have them cover a portion of or all of your closing costs by choosing an interest rate that is a little higher than market rate.

You may want to move quickly though. In October, HUD is changing the rules in upfront and monthly mortgage insurance that could increase your payment. On a $200,000 loan, the difference in monthly payment based on the changes could increase by $75.

Home Affordable Refinance:

If your loan is owned by either Freddie Mac or Fannie Mae, you may be able to refinance, even if the new loan amount is as high as 125% of the present value of your home. The 125% option may not be available by your lender but financing to 105% of the value of the home is widely available.

If the mortgage you have today does not have mortgage insurance, you could be eligible for a new loan without mortgage insurance, even though the new loan doesn’t have a 20% equity position. This is great news!

To find out if your loan is owned by either Freddie Mac or Fannie Mae, go to http://makinghomeaffordable.gov/.

Once in a Lifetime Opportunity

San Jose Home loan rates have never been lower. Long-term interest rates have never been lower.

With rates as low as they are today, many options exist. Depending on your needs, opportunity exists to either save a lot of money in your monthly payment, over the life of your loan, or both. Many people have recently chosen to refinance into shorter terms 10, 15, or 20 years in some cases bringing a large principal reduction payment to closing to get the loan they want.

Whatever your personal situation is, the best thing you can do is to investigate your options. It has been reported that the average rate in effect for all mortgages today exceeds 6.00%. If you or someone you know is currently in this situation, you owe it to yourself to see how you can save today.

Call me at 408.905.6261 or email me at Shashank@ArcusLending.com to find out how you can save on your San Jose home loan rates.