Largely credited with keeping the housing market brisk during the coronavirus pandemic, mortgage rates have recently dipped to historic lows. While Freddie Mac’s weekly average pegged the 30-year fixed rate at 3.13% yesterday, some home buyers are already seeing interest rates below 3%, a steep reduction from only two years ago when rates hovered close to 5%.
It is not only home shoppers who are taking advantage of the cheap cost of borrowed money. Homeowners are, too, through mortgage refinances. The latest reading of the Mortgage Bankers Association’s refinance index is 76% higher than a year ago. The trade group expects refinance originations to grow to $1.35 billion this year, reaching their highest level since 2012.
This propitious financing environment is precipitated by the Federal Reserve’s commitment to keep interest rates low (near 0%) and continue purchasing mortgage-backed securities in order to help the economy scale back the sharp Covid-19 downturn.
Before homeowners rush to refinance their mortgages, though, there are some basic questions to think about. Jerry Anderson, vice president of residential lending at Alliant Credit Union, helps shed light on some of the fundamentals.
More
https://www.forbes.com/sites/dimawilliams/2020/06/26/before-you-refinance-your-mortgage-ask-these-basic-questions/#468843567706
