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- United Wholesale Mortgage is offering discounted rates on FHA and VA streamline refinances through January 31, 2024.
- The discounted rates range from 5.749% to 6.249% and come with 1.5, 2, or 2.5 points, depending on the rate.
- While rates have dropped recently, they'll likely drop more in 2024. So you may not want to refinance just yet.
Wholesale mortgage lender United Wholesale Mortgage announced this week that it's now offering discounted rates on FHA and VA streamline refinances until January 31, 2024.
Mortgage rates have been heading down in recent weeks, though they're still elevated compared to where they were earlier this year. For FHA and VA borrowers who have been wondering when they'll get a chance to refinance their mortgages, UWM's new offering might provide an opportunity to do so.
UWM's 'sharpened pricing' on FHA and VA streamlines
UWM calls this new discount "sharpened pricing," and it's only available for FHA loan and VA loan borrowers looking to streamline refinance their mortgages. With this new pricing, borrowers can lock in a rate of 5.749% with 1.5 points, 5.999% with 2 points, or 6.249% with 2.5 points.
A streamline refinance is a type of refinance that's available on government-backed mortgages. They have fewer underwriting requirements, making them easier to qualify for and quicker to process.
"We're giving brokers who work with UWM the opportunity to create their own refinance boom for their FHA and VA borrowers," Mat Ishbia, president and CEO at UWM, said in a press release. "No other lender can match this offering, and with VA IRRRL and FHA streamline loans being so quick and easy to close, this the perfect opportunity to help borrowers lower their monthly payment, while also showcasing the elite service an independent mortgage broker can provide through their partnership with UWM."
A VA IRRRL is an interest rate reduction refinance loan, and is the VA's version of a streamline refinance.
What borrowers need to know about UWM's new discount
The first thing to know about this discount is that you won't be able to go directly to UWM to get it. UWM is a wholesale mortgage lender, which means you'll need work with a mortgage broker that partners with UWM to have access to this lender's offerings.
Mortgage brokers work with multiple lenders to help you compare a variety of offers at one time. This means that you can explore multiple refinance options and be sure you're getting the lowest rate possible.
Another important thing to know is that the discounted rates currently offered by UWM come with discount points. Mortgage discount points allow the borrower to get a lower interest rate, and they'll pay for these points at closing. One point costs 1% of the loan amount, meaning you'd pay $1,000 at closing for every $100,000 you borrow.
Even when considering the cost of the points, you may still be able to get a better deal with this discount than you would elsewhere. But you'll need to get quotes from different lenders to be sure, because you might also find better savings elsewhere.
How to get a discounted refinance rate from UWM
To qualify for this offer, you'll need to be at last 210 days past when you made your first payment on your current FHA or VA loan. You can only streamline refinance into the same type of mortgage that you currently have, so conventional loan borrowers aren't eligible for this discount.
Streamline refinances also require that you financially benefit from the refinance in some way. One way to meet this requirement is to lower your rate by at least half a percentage point. You may also qualify if you're refinancing an adjustable-rate mortgage into a fixed-rate mortgage.
Streamline refinances don't require appraisals. The UWM offer is also only for non-credit qualifying streamlines, meaning you could still be eligible even if your credit isn't in perfect shape. With a non-credit qualifying streamline, lenders aren't required to check your credit or calculate your debt-to-income ratio. They will, however, ensure that you've been making on-time payments on your current mortgage.
Is refinancing a good idea right now?
As with any sale or discount offered by a company, it's important to make sure this offer would actually benefit you before you take advantage of it.
Remember that you'll need to be at least 210 days past when you got your current mortgage to be eligible. Depending on when you locked in your current rate, you might not be able to get a lower rate by refinancing just yet.
As you consider when to refinance, think about how it would impact your costs overall, not just on a monthly basis.
"Refinancing to a lower rate will help reduce the monthly mortgage payment but could extend the time period it takes to pay off the loan," says Charles Williams, CEO of Percy, a mortgage and real estate behavioral analytics firm.
The longer your term, the more you'll pay in interest overall. However, if you're struggling with your current mortgage payment, refinancing into a longer term could help you lower your monthly costs, even if it means paying more over the long term.
You should also consider how much you'll pay in cash at closing to get the refinance. Average refinance closing costs are typically between 3% and 6% of the loan amount.
Work with your mortgage broker to compare this deal with other offers from multiple lenders. And keep in mind that most experts believe mortgage rates will go down in 2024, so you could end up getting an even better deal by simply waiting a few months.