Refinancers jumping on low mortgage ratesby Tim Manni
It’s always puzzling why more mortgage borrowers don’t fill out loan applications when mortgage rates are historically low and still falling. In this current low-rate environment, there are, however, the usual suspects that keep borrowers on the sidelines:
1. Borrowers want to wait and see how low mortgage rates will actually go before they start rising again.
2. Strict credit conditions prevent a certain pool of borrowers from getting involved.
3. Low rates have already allowed a multitude of borrowers the chance to refinance. (If the duration of the low-rate environment is somewhat extended, like what we are now experiencing and have experienced for quite some time, fewer borrowers have interest rates that could benefit from another refinance. Their potential savings aren’t great enough to outweigh the closing costs of a second refi.)
While there’s little recourse (currently) for borrowers who fit into numbers two and three, it finally seems that borrowers who are ready to transact are pouncing on the opportunities current mortgage rates can provide.
Refi apps see big increase
According to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending May 13, 2011, total applications were up 7.8 percent from the week prior. Refinance applications were up 13.2 percent from last week, the highest level since the week ending December 10, 2010.
“Over [the last five weeks],” said Michael Fratantoni, MBA’s Vice President of Research, “the refinance index has increased by about 33 percent. Refinance application volumes remain about 50 percent below the most recent peak last October.”
According to the latest numbers from HSH.com, for the week ending May 13, 2011, the overall average rate for 30-year fixed-rate mortgages (conforming and non-conforming alike) slipped back by eight basis points, moving into mid-May at an average of 4.91 percent, a new 2011 low.
Don’t wait any longer
If you’re a mortgage borrower waiting on the sideline for rates to drop even more, it’s time to get in the game. On Monday we passed along this advice:
If you’re in the market for a home loan, crunch the numbers to see if these current mortgage rates work for you. If they do, don’t hesitate to lock in that rate, you may never see mortgage rates this low ever again.
You stand the chance to lose out if you’re one of those borrowers playing the “mortgage rate waiting game.”