Improving housing markets could boost refinance option

[Oct 26, 2011.]

 

Two new surveys show that housing markets could be improving in the coming year. If you live in one of these areas, rising home values could provide the boost you need in home equity to qualify for a new mortgage at a reduced rate. While you wait for home values to rise, you should also be working on boosting your credit score by paying all your bills on time and reducing your debt. A higher credit score will not only improve your chances of qualifying for mortgage refinancing, but it will also make it possible to be approved for a lower interest rate.

Improving Markets Index

The National Association of Home Builders (NAHB) released their second edition of their Improving Markets Index (IMI) on October 6, 2011. This new index, which tracks markets that show signs of economic improvement, measures:

• Employment growth from the Bureau of Labor Statistics


• House price appreciation data from Freddie Mac


• Single family housing permit growth from the U.S. Census Bureau

According to the NAHB, "A metro area must show improvement in all three of these areas for at least six months after their respective troughs before being included on the improving markets list."

Twenty-three housing markets qualify as improving on the October NAHB list.

Mortgage refinancing and home values

Most conventional lenders only approve mortgage refinance loan for a maximum loan-to-value of 90 percent, although some will go to 95 percent for borrowers with excellent credit. FHA mortgage refinance loans are allowed up to 97 percent of the home value.

According to MarketWatch,a report from Veros, a risk management and valuation services firm, housing markets in North Dakota, South Dakota, Texas, Wyoming, Nebraska, Louisiana and Iowa are expected to improve in 2012, along with Honolulu, Pittsburgh, and Harrisburg/Carlisle in Penn. The housing markets in Washington, D.C. and Boston are expected to continue to be strong housing markets.

If you are interested in refinancing your home loan, go here to find out about options in your area.

 

About Author:

Michele Lerner is a freelance writer with twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance, and business.