Refinance Market Shaping Up for a Busy Fall

[Sep 10, 2009.]

 

A mortgage refinance is one of the few financial decisions that can affect every other area of an individual's finances. And refinance rates move, appreciably, with refinance news. Therefore, people looking to refinance need to watch for refinance news like hawks.

This fall is going to be a busy season for refinancing and refinance news.

Mortgage Rates Drop to Lows Not Seen Since May of 2009

Refinance hopefuls who withdrew their applications because rates ticked slightly upwards during the summer may want to put their applications back in the mix, because 30-year mortgage rates are right around their lows of May 2009, at 5.07 percent.

Mortgage rates on 15-year refinance loans, meanwhile, are hovering around 4.5 percent, with some companies offering 15-year refis for as little as 4.25 percent.

Screaming deals like these have caused mortgage applications to multiply with a quickness. The refinance guage conducted by the Mortgage Bankers Association rose 23 percent for the week ended September 4.

Overall, mortgage applications are up 17 percent.

Government Refinance Guidelines Starting to Come Clear

After a solid year of the vast majority of people having no real idea what the guidelines are to receive government refinance assistance, the rules of the game are starting to come clear. For the Home Affordable Refinance Program, for example, the primary rules are:

-- Current with payments

-- Home worth no less than 125 percent of loan amount

-- Loan amount of $417,000 or less (i.e. loan owned by Fannie Mae or Freddie Mac)

First Time Homebuyers Race Against Time

And then there is the $8,000 fully refundable tax credit for first time homebuyers, which is due to expire on November 30, 2009. With millions of foreclosure properties flooding the market, homebuyers are starting to see value in buying a house...so long as the government coughs up that $8,000.

Anecdotal and statistical evidence indicates that the mass arrival of first time homebuyers into the real estate market has helped prop up prices. As the tax credit nears expiration, home values may even see a slight rise.

Any stabilization, let alone a rise, in home prices is the most welcome of all refinance news for homeowners who are struggling to meet the stringent loan-to-value requirements of banks. "Knowable" home values allows appraisers, too, to assign more favorable values to homes.

These factors and more make now a fantastic time to put in a refinance application, watch out for refinance news, and try to get a cherry refinance deal done by the end of the year.

 

About Author:

Andrew Freiburghouse is a writer and businessman. He has worked as a magazine reporter, tax preparer, screenwriter, copywriter, and loan officer. He graduated from Santa Clara University in 1999 with a B.A. in English. Andrew was born and raised in the City of Los Angeles.