Refinancing activity slows as mortgage rates rise
While mortgage applications decreased for the week of February 4, 2011 according to the Mortgage Bankers Association (MBA), the refinance share of applications dropped to just 66.6 percent of all home loans.
Average mortgage rates rose slightly from 5.12 percent with 0.29 points on a 30-year fixed-rate loan to 5.17 with 0.31 points for the week ending February 4, according to HSH.com.
While rising mortgage rates are anticipated for this year by financial experts, home loan interest rates are expected to hover in the 5 percent to 5.5 percent range for 30-year fixed rate loans, which are still attractively low mortgage interest rates.
Many homeowners with equity in their property opted to refinance in 2010, but those who have not may want to consider refinancing into a 15 year fixed-rate mortgage. Average interest rates last week on a 15-year loan were 4.48 percent with 0.28, down from the previous month and the previous year. While monthly payments may rise from a 30-year mortgage to a 15-year mortgage, these low rates should make the payments more affordable. Homeowners who can afford higher payments will be rewarded by paying off their home faster and saving significantly on interest payments.
