Falling home loan rates spur rise in refis

07.15.09
By Lewis Green

Homeowners looking for a better deal on their home loans are taking advantage of falling interest rates to refinance, according to new figures from the Mortgage Bankers Association.

The MBA says that the amount of applications submitted for both purchases and refinancing rose by 4.3 percent on a seasonally adjusted basis in the week ended July 10.

The majority of these applications were from households looking to lower their monthly payments and save money by refinancing.

Applications for refis rose by 17.7 percent during the week, while those for purchase dropped by 9.4 percent, the MBA said. The share of refinance applications increased to nearly 55 percent.

During that same period, the average interest rate for a 30-year fixed-rate mortgage loan fell from 5.34 percent to 5.05 percent, while 15-year home loan rates decreased from 4.84 percent to 4.59 percent.

"We will see more refis as rates come down," Robert Dye of PNC Financial Group told Bloomberg. "It's nice to see mortgage rates coming down - that'll be a linchpin for the recovery."

Analysts hope that borrowers who are able to reduce their monthly home loan payments will be able to improve their household's financial situation - which, in turn, will assist in the recovery of the nation's economy.

Homeowners who are looking for a new deal on their mortgage loan will find that a good credit score will help them get the best rates.

More Housing Market Articles | News Home | Discuss in our Forum

Homeowners with good credit scores will get the best refinancing deals.