Are you considering home refinancing? Freddie Mac announced this week saw the lowest home loan rates since 1971. The number of loan applicant applying for a mortgage loan dropped by 5.9% during the week ended June 18. Mortgage refinancing activity fell 7.3% compared with the previous week, while purchase volume slipped 1.2%.
Comparing home refinance rates: A year ago, the average home loan rate was 5.22% and 10 years ago, people were refinancing at 8.15%. Today, the average 30-year mortgage rate is 4.675% and the average 10-year mortgage is now at 3.875%. Lenders continue to extend low interest rates because to the instability in the market and the European debt crisis. Read the original article > Compare Mortgage Refinance Rates
Mortgage refinance rates have dropped almost two percentage points below their housing boom peak and they remain available at record lows. Freddie Mac reported that mortgage rate average fell to the lowest point in 2010 4.72% plus 0.7 point for a fixed rate home loan on a thirty-year term. Clearly this is a great time for a home refinance loan, if you can get approved. Credit, Lack of Equity and Inability to Document Income are the 3 most common reasons that homeowners have not been able to refinance into these record low rates. A few years ago if you had good credit, you could pretty much qualify for any mortgage, but things have changed dramatically. Today even people who have 700+ credit scores are finding it difficult to qualify for a conventional or FHA mortgage and it is frustrating millions of borrowers who need to refinance. To receive the best mortgage refinance rates, you need good credit scores and the ability to document your income. Stated and no income verification loans are no longer viable options for home refinance opportunities. You also need enough home equity to meet the refinance guidelines. Many California borrowers had sufficient equity a few years ago, but the housing crisis has taken its toll on property values statewide.
The Mortgage Bankers Association released a report recently that outlined borrower problems in its latest report on home refinancing activity, which declined 14% last week after consecutive weeks of increased refinance loan volumes. The low interest rates and homebuyer tax credit have clearly made a positive impact on the mortgage refinance market in 2010. However, “despite the record low mortgage rates, many homeowners remain underwater on their home loans. This means that their mortgage is greater than their property value. According to MBA’s vice president, Michael Fratantoni, many distressed borrowers have been late on their mortgage payment which significantly damaged their credit and taking them out of contention for mortgage refinancing this year.
Since the pool of qualified borrowers looking to refinance is shrinking many lenders are offering aggressive mortgage specials. Many reputable mortgage lenders are offering a no point refinance and some are going further with the no cost mortgage that enables borrowers to refinance without coming out of pocket for any lending expenses. The no cost home loans also help borrowers avoid raising their mortgage balance in an effort to finance the lender fees and closing costs. According to mortgage marketing executive, Bryan Dornan, “Again qualifying for no cost refinancing is difficult because you need good credit, sufficient income that can be documented and enough equity in your home to qualify for the loan refinance program.” Dornan continued, “It’s not a motivation factor. The borrowers who need home refinancing most simply do not qualify under today’s tighter lending guidelines.”
To put it into perspective, interest rates dropped last week, yet refinancing volumes fell. In most cases, mortgage refinance rates follow the yields of longer-term Treasuries whether they rise or fall. In recent months it’s been down, as the European debt crisis has led to banks dropping interest rates even further. The vice president of HSH Associates Keith Gumbinger, “We have not seen mortgage rates lower than this in upwards of 50 years.” Gumbinger believes that the rates will begin trending higher once we get some good news regarding the economy.
