October 14th, 2009
Mortgage Rates Dip Below 5%
National mortgage rates dropped below 5 percent last week, spurring homeowners to get up out of their recliners and interested in cutting their monthly mortgage payments, all leading to a recent boost in refinancing applications. A combination of the government’s $8,000 tax credit, the FHA’s Streamline loan program, high affordability, and this encouraging dip below 5 percent in mortgage rates is paving the way for much-needed stabilization in the U.S’s shaky housing market.
When the average rate on 30-year mortgage loans dipped to 4.89 percent, refinancing applications suddenly resurfaced last week with more oomph than we’ve seen in some time. Reuters reports that refinance demand went up 38 percent shortly after the rates dropped. Mortgage brokers advise that refinancing is a good option for homeowners if it will shave off at least $100 from your monthly mortgage payment or can get a full percentage-point rate reduction.
That seems to be the case for many homeowners since the recent drop in mortgage rates spurred some borrowers, who had already refinanced in the last 18 months, to double-dip refinance to save even more money.
This is the second time this year rates have hit below 5 percent, besides this spring’s record low of 4.78 percent. With the large volume of unsold homes sitting on the market, these record low interest rates, and the federal tax credit and home loan programs all coming together in this favorable time, it’s shaping up to be a great environment to consider purchasing your dream home now.
Keep track with us as we continue to monitor mortgage rates , cross our fingers, and hope for more encouraging signs for our economy.
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