Low Mortgage Rates Not As Beneficial As You Think

Low Mortgage Rates Not As Beneficial As You Think
Please Share!

With 15-year and 30-year fixed mortgage loan rates at historic lows, there has been a lot of talk about the possibility of refinancing. Many homeowners have, thus, gotten very excited about the opportunity, only to be turned away and let down.

What most homeowners do not realize is that a low interest rate is not the only factor in refinancing. Declining home values have all but wiped out the amount of equity needed for each house, thus preventing any remote possibility of refinancing for most homeowners.

Because so many homeowners are underwater in their mortgages right now, many of them don’t even have the means to look into financing. As such, many experts fear that with the lack of true opportunity to refinance, there will be a sizable amount of homeowners that won’t be able to pay their mortgage loan payments.

Some banks are trying to work with their customers to come up with solutions to make refinancing possible. These banks are encouraging certain clientele to come up with alternative methods to make refinancing possible. Some of the suggestions include taking out a loan from a retirement fund.

There is no clear indication as to whether or not lending standards will be loosened up in order to make refinancing more readily available to everyone. Reports do indicate that the number of refinancing applications have increased in the past few months, hitting the highest volume in nearly a year. However, banks are not even considering the majority of the applications, which leads one to question whether or not the increased volume of refinance applications will have any effect whatsoever

Please Share!

About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

Leave a Reply

Twitter Chat