Home Refinancing Opportunities Fading?
2010 has been a great year for mortgage refinancing because the rates are at record lows. However, the writing is on the wall, Refinance now because home mortgage rates are going up soon. Most qualified borrowers have converted their home loan to a fixed rate mortgage, but there are quite a few homeowners that would like to refinance out of their ARM, but are unable to qualify with today’s new mortgage guidelines.
When will mortgage rates rise? Nobody knows for sure, but most finance advisors suggest that as soon as we get some positive economic news that mortgage refinance rates will rise. Needless to say, the fixed rate refinancing trend will continue while interest rate remain this low.
Badendyck is one of many homeowners who are looking at today’s fixed-rate mortgages and deciding to refinance. Just a few years ago, mortgage rate less than 5% seemed almost too good to be true, but with motivated home loan lenders and an aggressive Federal Reserve, 2010 continues to see declining interest rates for new home financing and fixed mortgage refinancing. And, if that isn’t enough to motivate you, 3/1 ARM and 5/1ARM home loans are available below 4%. These ARMS ensure fixed interest rates for 3 and 5 years. Yes, those home mortgages carry a higher risk than the fixed rate mortgage do, but to many homeowners the hybrid ARMS make sense. For example if you plan to move in the next few years, but would like to save some money every month in the meantime, then the 3/1 or 5/1 ARM’s are no brainers.
According to Freddie Mac, home mortgage rates on fixed thirty-year terms declined again last week to the lowest point of 2010. So it is not surprising that refinance application volume is at its highest level since October 2009, according to the Mortgage Bankers Association. Military borrowers get the best of both worlds because the VA mortgage loan guarantees a low fixed rate and no down-payment is needed for home buying. These no money down mortgage loan is only available to borrowers who have earned the VA loan eligibility.
For everyone else, there is the FHA mortgage option that extends affordable lending to all Americans with or without a military background. FHA mortgage refinancing has been very popular recently, because the conventional mortgages require more equity. Many homeowners have seen their home equity disappear as the housing crisis continues to grow. Again if you have good credit and enough equity to qualify, we suggest you get off the couch and talk to a loan company about locking into better mortgage with lower interest rates and lower monthly payments.
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