Mortgage Rate News

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Mortgage applications increased in the past week. The Mortgage Bankers Association offers this look at the change:

The Market Composite Index, a measure of mortgage loan application volume, increased 14.6 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 15.5 percent compared with the previous week.

“Mortgage applications rebounded last week, particularly refis, as rates dropped back below 5 percent,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.  “Purchase activity remains subdued, with application volumes remaining within the narrow range seen in the last few months.”

As expected, favorable mortgage rates are prompting attempts at refinancing, as well as purchases. Indeed, with spring coming, many would-be homebuyers are gearing up to make some purchases. It’s a good time, since there are still tax advantages associated with buying a home, and you can get a good deal. Home prices are expected to continue to fall more this year, and that should also help encourage buying.

Refinancing, as one might imagine is especially popular. Purchase mortgage applications increased, but only by a very little. The real increase is coming from refinance applications. For those who qualify, it is a great time to refinance, with 30 year mortgage rates below 5%, and 15 year fixed rate mortgages going for less than 4.30%. At these low rates, it is little surprise that many are trying to see if they can save money with a lower rate.

Indeed, if you can, you might be advised to refinance. You can get a shorter term, and save even more money over the long run. I myself plan to refinance this year, looking for a good mortgage rate, and a shorter loan term. It will help build equity faster so that I have a better down payment on my next home, since we will presumably move in 5-7 years.

What about you? Do you plan to refinance?