Everyone loves a bargain, especially if it is for a necessity like a mortgage and thousands of dollars can be saved by taking advantage of rock bottom prices. Because of the historic mortgage rate lows that are sweeping the nation, many lenders are experience higher then average volume and are happily struggling to keeping up with consumer demands.
According to the Wall Street Journal, "The average contract interest rate for 30-year, fixed-rate mortgages stood at 4.73%, down from more than 6% a year earlier. About 80% of all mortgage applications are for refinancing."
The positive surge in refinancing activity was kicked off by the Federal Reserve lowering their bank rate by three-quarters a point in January 2009. Since then the rates have slipped to somewhere in the 4.5%-4.75% range for qualified applicants.Only the cream of the financial crop and those whose homes have maintained value are able to take advantage of the lowest rates since the "Boom-Era" levels as banks are putting applicants under the microscope to help lessen their chances of default in the future.
The tougher lender requirements combined with the overwhelming amount of consumer inquiry is increasing the wait time needed for a deal to go through.
The good news is, this may actually result in new jobs being created in the financial sector as more bank staff with mortgage knowledge will be required to keep up with the steady pace of refinancing business that going on.Additionally, banks are benefiting from the fees associated with the refinancing activity, thus providing them with some much needed positive revenue and security at this time.
If you are one of the masses interested in refinancing your mortgage either to save money or simply to transition out of your current adjustable rate loan, the time is now. Make sure to calculate all the expenses required for this type of transaction, understand the full terms of the new loan agreement and enjoy the perks of locking in a low interest rate mortgage.
