Mortgage rates drop prompting homeowners to refinance
Posted on Tuesday, January 17, 2012 at 4:52:12 PM
Record low mortgage rates have sparked a wave of homeowners seeking refinancing options. Rates remained consistently low at 4 percent for most of the second half of 2011. However, 30-year fixed-rate mortgage rates dropped to 3.89 percent last week, which had first-time homebuyers and current homeowners scrambling to take advantage.
"We've had a huge increase," mortgage broker Andrew Soss of Stewart and Soss Mortgage in San Jose told Mercury News. "I'd say over the month, we've had a 40 percent increase in applications."
Homeowners looking at a home mortgage comparison to determine if refinancing is an option may see potential financial benefits with smaller payments as a result of the historically low rates. The low interest rates and the increase in consumer confidence may persuade some consumers to consider the housing market once again.
A $400,000 mortgage at 3.89 percent would be $263 a month less than one at 5 percent. Rates were at 5 percent in May 2010, according to the news source. Residential financing for consumers with stable income and a sound credit rating is becoming easier to attain as the housing market improves.