While the past couple days have seen a slight increase in current mortgage rates, mainly due to stronger than expected wholesale inflation reading in the Producer Price Index and better than expected retail sales reports, interest rates are still at historic lows and refinance applications have increased.
Refinance applications have increased in large for two reasons, historically low interest rates and President Obama’s Home Affordable Refinance Plan (HARP) which allows home owners to refinance their existing mortgage up to 105% of today’s home value. With the decrease in home values over the past several years, this program was developed to allow existing home owners who have seen a decrease in their equity still benefit from the historically low mortgage rates seen today. While the program was intended to help somewhere around 4-5 million home owners, it has unfortunately fell short of that mark to date only helping around 50,000 home owners.
Bankrate.com reports today that the national average mortgage rate for a 30 year fixed mortgage is at 5.36%, up from 5.32% last week. 15 year fixed mortgage rates according to Bankrate.com have actually decreased to 4.85% from 4.94%. The average interest rate is taken from a poll of 10 of the largest financial institutions in the Nation. Consumers must remember that while researching interest rates on the internet, you must use this only as a guide and every individual’s mortgage rate will vary with credit scores and loan to values.
Potential home buyers seeking to purchase their first home may never have another opportunity like we face today. Home values according to Trulia.com indicate average home prices are near 2001/2002 levels. Compound that with historically low mortgage rates and the incentive of the $8,000 tax credit, home affordability is at an all time high.
Industry experts have seen an incredible amount of volatility in mortgage rates over the past couple months due to an uncertain economy. One mistake many home owners and potential home buyers have made in the past is waiting for “what might be”. While mortgage rates were at an all time low of 4.5%, the media blasted 4% possibly on the horizon. While many home owners anticipated lower rates and held off on their refinance or purchase application, they lost out dearly for greed. If a situation can help now, take advantage because the unknown can come back to hurt you.
Written by Joshua Lerette – The Tampa Bay Mortgage Pro
Innovative Mortgage Services, Inc. Tel: 727-488-7355
Josh@TheTBMortgagePro.com
www.TheTBMortgagePro.com
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