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As rates fall again, more homeowners are rushing to refinance their mortgages. (iStock)
As mortgage rates fall, the demand for refinancing increases. Total mortgage refinancing requests increased 20% from the previous week, according to the latest weekly mortgage application survey from the Mortgage Bankers Association (MBA).
Mortgage rates fell for the third week in a row last week to 2.88% on a 30-year fixed-rate mortgage, according to the latest Freddie Mac survey. These low rates eased some tensions in the homeownership market; as competition intensifies, potential buyers have been forced into bidding wars and offer bids well above the asking price. But, this has been of greatest benefit to homeowners looking to refinance their mortgage.
In today’s low rate environment, refinancing can save some homeowners hundreds of dollars on their monthly payment and thousands over the life of the loan. Visit Credible to see your personalized rates and find out how much you could save on your monthly payments with a new mortgage.
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What is the reason for the rise in mortgage refinancing?
Mortgage applications have generally increased over the past week, and this was led by a sudden surge in mortgage refinancing applications, the MBA survey showed. The Composite Market Index, a measure of mortgage application volume, rose 16% for the week ending July 9, 2021.
“Aggregate demands rose last week, driven strongly by increased refinancing as rates fell again,” said Joel Kan, associate vice president of economic and industrial forecasting at the MBA. “Treasury bill yields have tended to decline over the past month as investors remain concerned about the COVID-19 variant and slowing economic growth.
“Refinancing requests rose more than 20% last week after adjusting for the July 4 vacation, helped by a 23% increase in conventional refinancing requests,” Kan said. “Additionally, there may have been a delayed overflow of requests from the week before, when rates also declined, but there was not much response in terms of refinancing requests.”
Check out Credible to see if you could benefit from it. refinance your mortgage at a lower interest rate. You can compare multiple mortgage lenders, including rates and fees, and see which one is right for you.
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Mortgage rates drop to near historic levels
In today’s low interest rate environment, it may come as a surprise to learn that mortgage interest rates have approached 20%. In 1981, the Federal Reserve fought inflation by raising interest rates, sending the 30-year rate skyrocketing to a record high of 18.63%.
Since then, interest rates have fallen dramatically, hovering between 4% and 6% as the economy recovered from the 2008 real estate crash. Times. Now, interest rates have fallen for the third week in a row to 2.88%.
If you want to know your personal interest rate on a new loan, visit Credible to compare the rates of several lenders at once and get prequalified in minutes without affecting your credit score.
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How does falling interest rates affect your monthly payment?
With interest rates dropping and homeowners increasingly looking to refinance their mortgage, it’s important to know if this could be of benefit to you. In May, 12.2 million homeowners would have benefited financially from the refinancing of their mortgage, the Black Knight’s latest report shows.
In terms of monthly payments, using today’s median home price of $ 287,148 and a 30-year fixed-rate mortgage term, borrowers would pay $ 4,475 per month if mortgage interest rates were to continue. the highest since the 1980s. Lowering it to an interest rate of 4% for the same loan term brings the monthly payment to $ 1,371.
By refinancing a mortgage from a 4% interest rate loan to a current interest rate of 2.88%, homeowners would save $ 179 per month, reducing their monthly payment to $ 1,192. To calculate how much you can save, use a refinancing calculator and enter the amount of your loan as well as the interest rates of the day. If you want to start getting a lower rate through mortgage refinancing, contact Credible to speak to a mortgage expert and get answers to your questions about closing costs, your current mortgage, or other refinancing options available to you.
Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.
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