Number of underwater homeowners dropped in the second quarter
If you would like to refinance but are underwater, owing more on your mortgage than your home value, you are not alone. The good news, though, is that the number of underwater homeowners dropped in the second quarter of 2011.
According to CoreLogic, about 22.5 percent of homeowners with a mortgage were underwater as of June 30, 2011, down from 22.7 percent in the first quarter of the year. CoreLogic’s research shows that about three-fourths of underwater homeowners are paying above-market interest on their mortgages, which the company defines as more than 5.1 percent. More than 40 percent of borrowers with a loan-to-value ratio of 125 percent or more are paying mortgage loans with an interest rate of six percent or higher.
According to HSH.com, 30-year fixed-rate home loans averaged 4.42 percent for the week ending September 9, 2011, while 15-year fixed rate home loans averaged 3.67 percent.
Refinancing activity
For the first time in several weeks, the Mortgage Bankers Association Weekly Mortgage Applications Survey showed an increase in home refinancing applications, up six percent over the previous week when adjusted for the Labor Day holiday. However, the Refinance Index was 23.5 percent lower than the same week one year ago.
Home refinancing options
According to the Census Bureau’s most recent records, in 2009 about one-third of the 76 million owner-occupied homes had no mortgage at all, either because they were purchased with cash or the homeowners had paid off their loan. For those homeowners with 100 percent equity, as well as homeowners with 80 percent equity, a refinance is an option.
If you have less equity, the Home Affordable Refinance Program, available to homeowners who are up-to-date on their mortgage payments but have little or no home equity, has been extended to June 2012. The Obama administration has proposed giving homeowners more access to low-interest loans, so future programs may be on the way. In the meantime, contact a lender to see if you qualify for a refinance program now.
