Steve Doyle’s Blog

The average 30 year fixed rate loan remained under 5% for the second week in a row! According to Freddie Mac, the rate dropped from 4.94% to 4.87% this week. This rate drop, and the current trend of rates dropping, has increased The Mortgage Bankers Association’s index of applications for new home mortgages and refinancings up 16% , as home buyers and homeowners take advantage of the lower rates. Mortgage rates in the Western United States were even lower, posting an average of 4.83% for a 30 year fixed rate, conforming loan.

“Long-term mortgage rates eased further this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Interest rates for 30-year fixed-rate loans were the lowest since mid-May; 15-year FRMs were at a record low since data were first collected in 1991 and 5-year ARMs also hit an all-time record starting in 2005. Compared to a year ago, consumers could shave almost $134 off their monthly mortgage payments on a 30-year fixed-rate loan for $200,000 by refinancing,” according to the Freddie Mac press release.

Secondary benefits are also being recognized from the reduction in home mortgage interest rates. Treasury Secretary, Timothy Geithner, announced today, that the administration’s goal of achieving 500,000 trial mortgage modifications by November 1st, has been met three weeks early! This means that 500,000 families that were about to experience foreclosure on their home, have had their mortgages reworked and will now able to operate under a new mortgage plan. Added to those happy families are another 3 million homeowners who have refinanced their existing loans and we are beginning to see a stabilization in the housing market.

Obviously, the rates can not and will not stay low forever. If you are at all concerned about your existing mortgage, now would be a very good time to visit with your lender and find out what your alternatives may be. With mortgage rates below 5%, you options are much greater.