Categorized | Finance and Mortgage

More Homeowners Consider Refinancing As Mortgage Rates Hit Record Lows

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With mortgage rates hitting record lows, more homeowners are looking much closer at refinancing in hopes of saving money. According to one of the major mortgage giants, rates for both 15-year and 30-year mortgages have fallen to their lowest rate in years.

Although the increase in refinancing applications due to low rates is considered to be positive, many experts believe that it will have little effect with respect to improving the downtrodden economy. The reason for the negativity is that interest rates have fallen repeatedly over the past few years, and there has been little gain in the number of home sales and their final sale prices.

The increase in refinancing applications may serve to put more cash into the hands of homeowners, though with a volatile stock market, and abysmal consumer confidence levels, it isn’t expected the overall economy a great deal.

Refinancing with the current low rates may seem like a no-brainer, but the truth is that many homeowners don’t see the action as a realistic possibility. Refinancing would lead many to have to start paying mortgage insurance. Stringent lending standards are also causing some homeowners to stay away from even the thought of refinancing.

The one group of homeowners that is refinancing more than any other is those who are looking to reduce the term of their mortgage. Those individuals in this group may have a 30-year mortgage, but are looking to switch to a 15-year or a 20-year mortgage loan. In their case, refinancing makes sense, as it will provide for lower rates.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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