Hawaii USDA Refinance - Current Rate 4.75% and Higher Do Something Now

Hawaii USDA Refinance - If you are a Hawaii homeowner with an existing USDA Guarantee Rural Loan and your interest rate is 4.75% or higher refinance now.  If you don't mind working with a mainland lender, call me at (866) 552-5912 for your Hawaii USDA Refinance.  If you feel more comfortable with a local lender start calling around to determine your Hawaii USDA Refinance options.  Either way the escrow office, where you sign your final loan documents, is always local to you.

Here is why you should do something now:

• USDA interest rates hit their lowest levels of the year on Friday.  As a matter of fact USDA interest rates are close to historic lows achieved in December before they shot up in the first week of January
• Hawaii USDA loan size tend to be the highest in the United States.  This is important as the lender closing cost credit, which can be used to pay a borrower's closings costs, are based on a percent of the new loan amount. Thus the larger loan size, the greater the lender credit.
• Hawaii USDA refinance closing costs, including the cost of re-establishing an escrow account, are amongst the lowest in the United States

Combine these factors and homeowners considering a Hawaii USDA Refinance Loan have a greater incentive to refinance their existing loan than borrowers in almost any other state in the U.S. 

How great are the benefits of a USDA Refinance Loan?  Consider two scenarios for a homeowner with a $400,000 mortgage loan, $1,500 in property taxes, $600 in homeowner insurance, and a middle credit score over 720.  Based on a typical loan closing settlement statement, lender fees and escrows will run around $2,500, and establishing the new escrow account will require $1,500.  Then there is the 2% USDA Guarantee Fee or $8,000 based on a $400,000 loan amount, which is paid to Rural Development on all USDA transactions.  This USDA Guarantee Fee can be financed into the new loan amount or paid at the settlement table. 

Scenario 1 - Lowest Interest Rate Option.  If interest rates allow for a lender closing cost credit of 1% of the loan amount then the borrower can have the lender pay all closing costs except for the 2% USDA Guarantee Fee, which can be financed into the new loan amount.  As of April 5, 2013 this interest rate was 3.25%.  For today's interest rate quote use the USDA Interest Rate Quote Calculator.

Scenario 2 - Lowest Closing Costs Option.  Same as scenario 1, except instead of financing the 2% USDA Guarantee Fee, the lender credit pays this fee in addition to the closing costs.  As of April 5, 2013 this interest rate was 3.75%.  For today's interest rate quote use the USDA Interest Rate Quote Calculator.

Which scenario is better is based on the anticipated time of homeownership.  If the homeowner will own the house for more than five year than scenario 1, can be justified.  Otherwise scenario 2 may be a better option as the outstanding loan amount isn't increased. 

For the purpose of clear disclosure, USDA Loans now charge an Annual Fee equal to .4% of the outstanding loan amount, which is collected on a monthly basis.  For simplicity purposes most borrowers consider this a mortgage insurance cost.  To equate the cost of the Annual Fee to an interest rate cost, add .35% to the proposed interest rate.  If considering a 3.25% rate, think about that rate as effectively 3.60%.  If your current interest rate is 4.75%, even with the USDA Annual Fee, you are still savings approximately 1.15% in annual interest rate savings.   

Since interest rates change on a daily basis reference the webs only USDA Interest Rate Quote Calculator.  Just enter the property state, loan amount, and credit score.  The calculator will determine your interest rate options, closing cost credit, and monthly fee.  To determine your monthly payment savings use the USDA Payment Calculator.  This is only available on USDARefinanceLoan.com

To get started on your Hawaii USDA Refinance you can submit an online loan application or call me at (866) 552-5912 and I can take a loan application over the phone in about five minutes.