Most home analysts insist that there has not been a better time to refinance a home or condo mortgage. With home loan rates as low as they are due to the governments oversight, many people can save money every month by refinancing their mortgage. A 30 year fixed rate mortgage is around 5.45% down over .5% from just a week ago, while a 15 year mortgage that is fixed rate is near an all time low of 5.3% down over .45% from recent rates. The low rates are helpful in reviving the struggling real estate market, although first time owners would be most helpful for the overall market. A refinanced mortgage can save a homeowner hundreds every month by taking advantage of these new super low rates. If your credit has improved since buying your home, you will also benefit from this. You are also able to shorten the length of your mortgage if you choose so, consolidate loans, or use your homes equity to get a bigger mortgage. Homeowners can get credit much easier now, without the high risk of defaulting on your loan payment.
Does this mean that it is really easy to get refinanced in a housing market like this? Simply put, no. Real estate markets in big cities across the country, Richmond, Washington, St. Louis, San Francisco, San Diego, New York, and Atlanta have been reporting a down market. Which is a good measure for the conditions country wide. Its a multitude of things from, lower house prices, to the rise of foreclosures, to job loss and declining home sales all playing their role in this down market. There is plenty of money out there to fund loans, and refinances, but typically a borrower needs a credit score of 700 or more for a good chance of an approval with terms that take full advantage of the current low rates. If you have a lower credit score, you may need to pay a fee up to around 2.5% of the total loan amount you are seeking. It is still a tight credit market. A recent federal report shows that a lot of areas around the country that had a strong housing market, are reporting constrictive lending practices. The thought and actual research shows that with less money people are more hesitant to get themselves into a long term financial commitment such as a mortgage loan that can extend up to 30 years. Even worse, the recent rise in unemployment is going to make homeowners make tough financial decisions, some will be pushed into foreclosure. This means that for the next 6 months, as the layoffs occur, foreclosures are going to inevitably go up.
If you can qualify for a good refinance rate, you should still save a good deal of money every month on the same mortgage. Even including closing fees of up to $1700, you should recoup these fees within months.
-M Petrone


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