Category: Refinance (Page 1 of 11)

Now’s the Time: Mortgage Rates Are Dropping, but the Window May Be Short

September 12, 2025 / Tom Bonetto / 0 Comments

Mortgage interest rates have taken a welcome step lower in the past nine days—and that means homeowners have a fresh opportunity to refinance.

According to Freddie Mac, the 30-year fixed mortgage rate slid to 6.35% the week ending September 11, down about 0.15% from the prior week.

The 15-year and 20-year fixed fell as well, landing around 5.875%.

For investment properties and 2nd homes, we are seeing rates in the mid 6% range, as well.

Other industry surveys—Bankrate, Money.com, and Reuters—are showing similar declines across the board.

What’s Driving the Drop

The reason for the dip lies in the bond market. The 10-year Treasury yield, which heavily influences mortgage rates, has retreated in recent days.

Investors are increasingly betting that the Federal Reserve will begin cutting short-term interest rates later this month.

Combined with softer labor market data and easing inflation pressure, long-term yields have fallen—and mortgage rates have followed.

Treasury Dips Don’t Last Long

If this feels like déjà vu, that’s because it is. Since mid-2023, there have been eight significant downward moves in the 10-year Treasury yield.

You can see them highlighted in the chart above.

Each one of those dips lasted anywhere from just three days to three weeks before the trend reversed and rates climbed again.

That’s the key takeaway: lower-rate windows don’t last long. Waiting to see if rates fall further often means missing the opportunity altogether.

Why Refinancing Now Makes Sense

If you bought a home within the past two and a half years, there’s a good chance your mortgage rate is higher than where the market is today.

Even a small rate reduction can create meaningful monthly savings and improve long-term financial flexibility.

If you’ve recently completed a cash-out refinance, now may be an especially smart time to review your options. Lowering your interest rate can reduce the cost of carrying that debt, even if you pulled equity from your home earlier this year.

Beyond lowering monthly payments, refinancing may also help you:

Switch from a 30-year to a 15- or 20-year term, paying off your home faster.
Consolidate higher-interest debt into your mortgage at a lower rate.
Remove mortgage insurance if you’ve built enough equity.

The Time to Act Is Now

Rates are still volatile.

Inflation readings, labor reports, and Federal Reserve announcements can all shift the bond market quickly. The history since 2023 is clear: when Treasury yields dip, mortgage rates dip too—but they rarely stay down for long.

That’s why now is the time to act.

If your current mortgage is above today’s averages, let’s run the numbers together. Locking in while rates are on the downside could secure savings that last for years to come.

Here’s The Bottom Line

Lower rates don’t wait around. If you’ve bought a home in the past 2.5 years or completed a recent cash-out refinance, this is your window to refinance into a smarter mortgage.

Reach out to me today to make sure you are not missing out and we can begin to explore options.

If it’s easier, you can schedule a call with me here…

The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.

Timing the Mortgage Refinance Market: Why Preparation is Everything

August 18, 2025 / Tom Bonetto

computer laptop beside hour glass on brown wooden surface

When it comes to refinancing your mortgage, timing isn’t just important—it’s everything.

The chart above of the U.S. 10-year Treasury yield shows a clear pattern: rates dip only occasionally, and those dips are often short-lived.

The highlighted yellow sections mark the moments when interest rates were at their lowest, and each time, the opportunity lasted only briefly before rates bounced higher.

Missing that window could mean paying thousands more in interest over the life of your loan.

Mortgage Rates and the 10-Year Treasury Yield

The 10-year Treasury yield is a leading indicator for mortgage rates. While the two aren’t identical, they move in the same direction.

Mortgage rates are not set by the Federal Reserve and do not closely follow the federal funds rate in the short term.

When Treasury yields fall, mortgage rates usually follow—making these rare dips the sweet spot for locking in a lower rate. The challenge is that the market doesn’t send out a “last call” before it shifts. Rates tend to drift lower over time, but they can spike back up overnight.

That’s why being prepared before the dip happens is crucial.

two red balloons with percentage symbols on white background

Today’s Rates

Right now, we’re in a market where rates have been easing slightly. If they dip just a little more, it could create one of those rare refinancing windows for those with mortgages done in the last 3 years—whether for your primary home or an investment property.

But history tells us those windows don’t stay open for long. Waiting until rates hit bottom before starting your refinance process often means you’re already too late.

Beware Unwanted Solicitations

You may also notice that during these periods, you’ll get calls, texts, or emails from other lenders—or even your current loan servicer—promising incredibly low rates.

Many of those “too good to be true” offers come with fine print or hidden conditions. Sometimes, the rate being advertised isn’t even available to you based on your profile.

My role is to cut through the noise and guide you toward the right move at the right time, with terms that truly benefit you.

Get Ready Now

The smartest way to capture one of these brief dips is to be ready in advance. That means putting together or updating your application, pulling any needed documentation, and having your financial picture up to date.

male athlete preparing to sprint on track

This way, when the market hits that sweet spot, we can move instantly to lock in the best rate—before it disappears. Think of it like a runner crouched at the starting line, ready to sprint the moment the gun fires.

If we prepare now, you won’t need to scramble when the market moves. We’ll already have everything in place to take advantage of the opportunity.

This preparation could save you not only money on your monthly payment but also tens of thousands over the life of your mortgage. And for investors, locking in a lower rate means improved cash flow and a stronger long-term return on your property.

The Bottom Line

Refinancing is all about timing, and timing is about preparation. The dips in the market happen quickly and without warning.

By reaching out to me today, we can position you to act decisively when the next one arrives. Don’t leave your savings to chance—let’s get ready now so that when the right moment comes, you’ll be first in line to benefit.

If it’s easier, you can schedule a call with me here…

How FHA Loans Work | The Pros and Cons

February 24, 2025 / Tom Bonetto

One of the more popular financing options for buyers are FHA loans. These mortgages are backed by the Federal Housing Administration (FHA) and can be a great fit for many would-be buyers.

These loans are designed to make homeownership more accessible by offering flexible qualification requirements compared to conventional mortgages.

At the same time, FHA loans also come with specific costs, such as mortgage insurance premiums (MIP), which borrowers should carefully consider.

Let’s dive in on the specifics…

What Is an FHA Loan?

An FHA loan is a government-backed mortgage insured by the FHA but issued by approved private lenders, such as mortgage firms, banks, or credit unions.

The FHA does not lend money directly; instead, it provides insurance to lenders, reducing their risk and encouraging them to offer loans to borrowers who might not qualify for conventional financing. FHA loans are particularly appealing to first-time homebuyers and those with some financial constraints.

An FHA loan can only be utilized to purchase a primary residence, not a 2n home or investment property.

Eligibility Requirements

To qualify for an FHA loan, borrowers must meet specific requirements set by the FHA. The minimum credit score for an FHA loan is typically 580 for a 3.5% down payment, but borrowers with scores between 500 and 579 may still qualify with a 10% down payment.

Other requirements include a steady income and proof of employment. Additionally, the home being purchased must meet FHA property standards to ensure safety and livability.

Benefits of FHA Loans

Low credit score requirements: Borrowers may qualify for an FHA loan with a credit score as low as 500. However, most lenders require a minimum score of 580, which is still lower than the conventional loan minimum of 620. The higher your credit score, the more favorable your loan terms will likely be.

Low down payment requirements: FHA loans are available with down payments as low as 3.5% of the purchase price.

Competitive interest rates: Interest rates on FHA loans are comparable to conventional loans, but rates are sometimes lower for FHA loans because the government backing makes FHA loans lower risk to lenders. But the interest rate you’re offered is based on your full financial profile and mortgage insurance.

No prepayment penalty: FHA loans can be paid off at any time, including for reasons like refinancing and selling the home.

Down payment assistance: There are a wide range of down payment assistance programs that can be applied to FHA loans. Gifts from relatives can also be utilized for the down payment and closing costs.

Disadvantages of FHA Loans

Mortgage insurance premiums (MIP): All FHA loans require homeowners to carry mortgage insurance in case of loan default. This includes both an upfront, one-time premium at closing, as well as ongoing monthly premiums paid alongside your monthly mortgage payment.

Limited loan amounts: There are limits to how much you can borrow with an FHA loan. The amount varies by location, based on the cost of living in that location, and is updated yearly. You can reach out to me to find out what the FHA loan limits are in your specific county.

Property requirements: The Federal Housing Administration wants to ensure the home being purchased is safe to live in, so there are certain criteria the home must meet. Homes in need of significant repair, including issues like damaged foundations, exposed electrical systems, lead paint, and inadequate ventilation won’t qualify for an FHA loan.

Mortgage Insurance Premium (MIP)

FHA loans require Mortgage Insurance Premium (MIP). This insurance protects the lender in case the borrower defaults. It isn’t optional and is mandatory on all FHA loans.

FHA loans require both an upfront MIP (UFMIP), which is 1.75% of the loan amount, and an monthly MIP that ranges from 0.45% to 1.05% of the loan balance, depending on the loan term and down payment.

Unlike private mortgage insurance (PMI) on conventional loans, FHA MIP often lasts for the life of the loan unless the borrower refinances into a conventional mortgage.

FHA Loan Limits

FHA loans have borrowing limits that vary by location and are adjusted annually based on home prices in different areas.

These limits ensure that FHA loans are used for modestly priced homes rather than luxury properties. Borrowers purchasing homes in high-cost areas may find these limits restrictive, making conventional loans a better option in some cases.

Please reach out to me to find out what the FHA loan limits are in your specific county.

FHA Loan Closing Costs

Closing costs are the out-of-pocket expenses borrowers must pay in order to finalize their loan.

They include things like lender fees, appraisal, title services and documentation costs. Buyer closing costs are usually between 2% and 4% of the home’s purchase price and must be paid at closing.

FHA guidelines also allow sellers to cover some of the buyer’s closing costs, up to 6% of the purchase price (effectively all closing costs). Of course, this would have to be part of your negotiations with the seller when you make your offer.

How to Apply for an FHA Loan

The process of getting an FHA loan is similar to getting a conventional loan.

Borrowers will need to go through the formal application process and provide information and documentation about their income, employment, and credit history. Once the application is complete, your mortgage lender will review it and determine if you meet the requirements for an FHA loan.

Refinancing Options

FHA borrowers have access to refinancing options, including the FHA Streamline Refinance program, which allows homeowners to refinance with minimal paperwork and no new appraisal.

This can help borrowers reduce their interest rate and monthly payments. However, refinancing into a conventional loan may be necessary to eliminate MIP, which can become costly over time.

Conclusion

FHA loans provide a valuable path to homeownership for those who might struggle to qualify for conventional financing.

With lower down payments and flexible credit requirements, they open the door for many buyers. However, the added cost of MIP and property restrictions can be significant drawbacks.

Understanding the full scope of FHA loans helps borrowers make informed financial decisions and determine whether this type of mortgage is the best fit for their needs. Reach out to me to discuss if this loan option is right for you!

Why a Cash-Out Refinance Might Actually SAVE You Money…Even Though Your Current Mortgage Rate is Under 4%

February 7, 2025 / Tom Bonetto

Believe it or not, refinances still make up almost one third of all mortgage transactions, even though mortgage rates are higher than in previous years. You may be wondering why this might be…

First of all, most homeowners have record levels of equity in their homes. The Federal Reserve data reveals that the total value of owner-occupied real estate registered at an eye-popping $48.2 trillion!

On the other hand, many consumers have amassed a large amount of debt, paying much higher rates of interest, thanks (in part) to the Fed’s mismanagement of inflation.

a black piggy bank in the middle of coins

Do you know what your overall, blended interest rate is when considering your mortgage, car payments, HELOC, and credit card payments?

Interestingly, most out there are only making the minimum payments, with no path to paying off their debt.

Today’s homeowners are benefiting from a type of refinance where they pull that equity out of the home to pay off those debts, saving money on the overall monthly payments.

There are several compelling reasons why a cash-out refinance can be a beneficial move.

Debt Consolidation

crop anonymous person calculating profit on smartphone calculator near banknotes

By consolidating high-interest debt into a lower-interest mortgage, homeowners can potentially save money in the long run.

I have a Debt-Consolidation calculator and a Blended Interest Rate calculator available to analyze all client situations, as well.

For instance, paying off credit card debts, HELOCs, car loans, or personal loans with a cash-out refinance can reduce overall interest payments, saving money on monthly payments and providing more financial breathing room.

Immediate Funds Available

Accessing the equity built up in a home through a cash-out refinance can provide funds for a wide variety of uses.

Whether it’s home improvements, debt consolidation, paying for education, or other significant expenses, this approach allows homeowners to tap into the equity they’ve accumulated.

The interest rates for mortgages are often lower than rates for personal loans or credit cards, making a cash-out refinance a potentially more cost-effective way to access funds.

Adding Flexibility

A cash-out refinance provides flexibility for homeowners to manage their finances according to their needs and goals.

Whether it’s securing funds for an investment opportunity, addressing unforeseen expenses, or improving the home’s value and livability, this financial tool offers a versatile way to leverage the equity in one’s home for various purposes.

Additionally, there are ways to gain equity at an accelerated pace and significantly shorten the length of your mortgage, by applying those savings as an additional payment each month.

Call me today to review your current debt situation and see if I can help!

Refinance in Today’s Market…Really? Why It’s More Common Than You Think!

December 11, 2023 / Tom Bonetto

Believe it or not, refinances still make up almost one third of all mortgage transactions, even though rates have risen. You may be wondering why this might be…

Many consumers have amassed a large amount of debt, paying much higher rates of interest, thanks to the Fed hiking rates so aggressively.

Most out there are only making the minimum payments, with no path to paying off their debt. At the same time, most homeowners have record levels of equity in their homes.

Today’s homeowners are benefiting from a type of refinance where they pull that equity out of the home to pay off those debts, saving money on the overall monthly payments.

There are several compelling reasons why a cash-out refinance can be a beneficial move.