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Refinancing a Mortgage? Don’t Forget “Consolidation and Assignment”

December 29th, 2008

This blog isn’t really supposed to be about tips, and hints. But, a couple of days ago, the New York Times gave such a good piece mortgage advice that I just have to pass it on. Read the rest of this entry »

Mortgage refinancing: an essential step toward real estate recovery

December 24th, 2008

On Monday, I wrote about last week’s figures from the Mortgage Bankers Association. It looked, I said, as if current record rates were boosting loan applications, which were 37.3 percent up on the same week last year.

However, I went on to say that more than three-quarters of all applications had come from those seeking to refinance existing mortgages, and that that might not be such good news.

I haven’t changed my mind. In an ideal world—or even just in a healthy market—there would be a whole lot more people wanting new mortgages, and many fewer wanting to re-engineer their existing ones.

But we already know that the market is not healthy. In fact, it is just the opposite. And, like any invalid, it has to take baby steps before it starts thinking of running anywhere.

Refinancing is just such a baby step. People have to rediscover their confidence before they start trading up or entering the real estate market. And that means an extended period of stability along with much lower repossession, and hardship rates.

We’re getting there. But it’s going to take a while.

In the meantime, I hope you have a very happy holiday.

Mortgages: Yet More Good News for Borrowers

December 22nd, 2008

Freddie Mac unveiled yet more good mortgage news for borrowers on Friday in its weekly survey of average rates. The figure for a 30-year loan was 5.19 percent, which the Wall Street Journal says is the lowest since records began in 1971, 37 years ago. New 15-year mortgages were averaging 4.92 percent.

The Journal also pointed out that mortgages generally closely track long-term government notes, and that these are also continuing to decline. This means that there’s every reason to expect mortgage rates to continue their downward trend.

All of this positivity is translating into a much larger volume of mortgage applications. The Mortgage Bankers Association reports that these are up 37.3 percent up on the same week last year. However, refinancing represents 76.9 percent of all activity, which may not be quite such good news.

More on that soon.

Pulling the Trigger: Riding the Rate Roller Coaster

October 16th, 2008

What does the sharpest mortgage interest rate increase in 21 years teach us? When columnists were happily touting the favorable mortgage rate market just last week? If you were one of those with loans locked in and ready to go, you know the answer. It’s that if you want to take advantage of interest rate decreases you can’t be casual. The borrowers who were already approved could wait until rates dropped into their range, then strike and complete their mortgage refinance. Those who dithered didn’t make it. So get preapproved. And keep your approval updated (once every six months should do it unless something changes like an applicant getting a new job). A good loan officer can keep you informed when your target rate is available, lock your loan, and complete your refinance–as long as you’ve done your job and taken care of the preliminaries.