Dec 2009 18

Courtesey of Brian Cav over at Smarter Borrowing

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The answer is most likely yes!

Borrowers are taking advantage of rock bottom rates to refinance their home mortgages. Mortgage interest rates are at all-time near record lows! Homeowners are using the opportunity to adjust the terms, payment and interest rate on their loans. This “rate fiesta” might be coming to a halt soon, though – in 2010 the government will stop buying mortgage-backed securities. Without this enormous customer, rates will start to climb. Here’s what the Wall Street Journal had to say earlier this week about the recent surge in applications and the coming market changes:

Last week’s post-Thanksgiving shopping rush also saw a surge in mortgage applications, with loan application volume up 8.5% from Thanksgiving week on a seasonally adjusted basis.

But mortgage rates rose modestly last week, to an average 4.88% from 4.79%, according to the Mortgage Bankers Association, ending a six-week run of declining 30-year fixed rates.

The boost in applications was driven primarily by refinance interest, and the MBA’s Refinance Index gained 11% from the previous week, while the Purchase Index was up 4%. New home loan applications were driven almost wholly by demand for government-backed loans from the Federal Housing Administration and other federal agencies.

Mortgage rates have been at near-record low territory for the last couple of months, but the big question is what will happen next year, when the Federal Reserve is scheduled to end its purchase of mortgage-backed securities that has helped push rates down for much of 2009. (Nick Timiraos, WSJ real estate blog, 12/9/09)

Refinancing could save you a considerable amount of money over the life of the loan and potentially improve your overall financial outlook!

How would refinancing now help you?

  • Refinance to a lower interest rate which will lower your monthly payments.  What is your current Rate?
  • Convert your current Adjustable Rate Mortgage (3/1, 5/1, 7/1, or 10/1 ARM) to a fixed- rate loan, which will keep your payments safe from possible interest rate increases. The 30 year fixed is at a all-time low, lock it in and give yourself piece of mind
  • Shorten your loan’s term to save even more money. 25 year fixed? 20? Can you afford a 15 year fixed mortgage payment?
  • Combine a first and second lien to a single loan for simplicity and savings. Debt consolidation to one loan!

You may also be able to tap into your home’s equity with a cash-out refinance and use the cash to fund home improvements, college tuition, or other major expenses.

What To Do:

1.  Submit a Refinancing Application via Phone, Email, Web, etc.

2.  Mortgage Refinancing Application gets Processed and Approved

3.  Pass along your Approval Conditions and Disclosures, Appraisal gets completed and Approved

4.  Schedule a closing 45 (+/-) Days from Application Date

bc@SmarterBorrowing.com 617.771.5021