An article in the Washington Post this past weekend talks about how the number of people refinancing their mortgages right now are high since the interest rates are at their lowest for quite some time.
Lower Rates, Coming Resets: An Opening For Refinancing: “Is it a refi renaissance? Or a fast-closing window of opportunity?
Nobody can say for certain, but there's no doubt about this: Thanks to the lowest mortgage interest rates in a year and a half, nearly 60 percent of all new mortgage applications by mid-January were for refinancings, according to data compiled by the Mortgage Bankers Association. Rates this week were 5.69 percent for a 30-year fixed-rate mortgage and 5.21 percent for a 15-year fixed-rate loan, Freddie Mac said.
Some home-loan companies reported much higher proportions of refinancings. At Associated Mortgage Group in Portland, Ore., 80 percent of new applications this month have been for refinancings. ‘This has been the busiest January I've had in 20 years,' said David Jolivette, Associated's president.”
My wife and I are currently in a 6.5% fixed rate mortgage, so we've been looking at doing a refinance. The problem we've run into is that our home's value has dropped significantly in the past year, so our equity position has worsened. We now have less than 20% equity in the house, and more than one mortgage company has told us, despite our stellar credit, that we will have to get mortgage insurance in order to refinance. The article talks about this as well:
appraised values are a major hurdle for some homeowners. During the boom years, when property values were soaring, meeting the minimum equity tests for refinancing was rarely a problem — even when owners wanted to pull out additional cash.
But in the past nine months, most national lenders have tightened underwriting rules and are now extra-cautious about appraisal accuracy, borrower equity and credit scores, especially in areas where prices have been soft or declining, Lipes said.
We'll continue looking for a mortgage company that will let us refinance, and give us a good appraisal. It would be a shame to miss these great rates. Anyone have any suggestions?
Have you refinanced your mortgage? Tell us about your experience in the comments.