Mortgage Rates Decrease As Homeowners Refinance

Mortgage Rates Decrease As Homeowners Refinance
Many homeowners are taking advantage of declining mortgage rates to refinance out of their adjustable rate mortgages. Even homeowners with a fixed rate mortgage are taking the opportunity to shorten their mortgage terms and lower their mortgage rates and payments as it has been years since mortgage rates have been this low.

The current average interest rate for the 30 year fixed rate mortgage plummeted to an average of 5.62 percent while the 15 year fixed rate mortgage fell to an average of 5.07 percent. Adjustable rate mortgages have also seen a decline as reports show a weakened U.S. economy.

For the second consecutive week mortgage applications have skyrocketed to levels that have not been seen in a while. Refinance applications rose 43.4 percent to account for 62.7 percent of total loan applications.

The home purchase market has remained fairly steady as many consumers are still leery about the housing market. Purchase application did increase, however, 11.4 percent from the previous week.

Even though the criteria for qualifying for a home mortgage is stricter then a year ago, many homeowners are qualifying for traditional and FHA fixed rate mortgages with less than perfect credit.

Submitted by admin on 1/16/08
Sources: Business Week Mortgage News Daily