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2008 Refinance Boom May Be Looming

Refinance

With the slowing economy, talks of recession, the tick up in unemployment, and the volatile stock market, the 30 year fixed rate mortgage has slowly continued to drop. A couple of weeks ago, the Feds finally took steps to combat the signs of recession by cutting the Fed rate by a combined 125 basis points. Usually the Fed funds rate has little to do with fixed rate mortgages, but it usually does not take long for fixed rates to follow the trend.

Long-term mortgage rates are already low and may go lower. Usually when the economy faces a possible recession, these rates drop. We all remember what happened to rates from 2003 - 2005, after the 2001- 2003 recession. So, if history is any indication, there is a good possibility that rates can fall further. This is good news for potential buyers, but even better news for current homeowners with decent credit that want to refinance out of ARMs or higher rate fixed mortgages.

Rates have not been this low in a long time, and it may be worth investigating whether you can benefit from this low rate environment.

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Victor Emeli

Posted by Victor Emeli - www.HouseWealthy.com on 02/01/2008 11:56 PM

Comments (9)

2008 refinance, refinance, mortgage, loan officer, lender

9 Comments on 2008 Refinance Boom May Be Looming

So, are refinances up in your area? or is it originating loans?

Vickie Nagy Vnagy@EmpireRA.con

02/02/2008 12:28 AM

by Vickie Nagy, Realtor, Specializing in San Ramon, Danville & the Tri-Valley! (Empire Realty Associates)

So, are refinances up in your area? or is it originating loans?

Vickie Nagy Vnagy@EmpireRA.com

02/02/2008 12:30 AM

by Vickie Nagy, Realtor, Specializing in San Ramon, Danville & the Tri-Valley! (Empire Realty Associates)

when you're in an area of declining avlues or an area that has had delining avlues the rates just don't matter because you don't have any equity. this will certainly prevent a boom.

02/02/2008 10:07 AM

by Jay Beckingham (Allied Home Mortgage Capital Corp.)

Vicky,

In my area (Washington, DC), refinances are leading loan originations. There are still homeowners with equity that are looking to lower their existing fixed rates.

Victor

www.HouseWealthy.com

02/02/2008 11:35 AM

by Victor Emeli - www.HouseWealthy.com (The Manor Enterprises)

Jay,

That is true, areas with declining values make it harder to refinance. But in general, values have really not declined as much on a percentage basis. I think the bigger issue is the tightening of lending guidelines. It really pays to have good credit nowadays.

Victor

www.HouseWealthy.com

02/02/2008 11:38 AM

by Victor Emeli - www.HouseWealthy.com (The Manor Enterprises)

Even though rates have slightly ticked up, refinances seem to be the majority of mortgage applications right now.

www.HouseWealthy.com

Victor

02/04/2008 09:06 PM

by Victor Emeli - www.HouseWealthy.com (The Manor Enterprises)

Looking at my pipeline I have 60 percent refinances and 40 percent purhcases going on now, its been awhile but refinances are definitely here and we have many folks that are actively watching rates.

02/05/2008 09:50 PM

by Darren Stewart (OakStar Bank)

Darren,

This is definitely true. I am also seeing an uptick in refinance interest. Hopefully purchase interest will also begin to ramp up.

www.HouseWealthy.com

02/05/2008 09:54 PM

by Victor Emeli - www.HouseWealthy.com (The Manor Enterprises)

Victor - just down the road from you in Annapolis, Md refi's are smoking in my office now..... if conventional rates got to 730 or even 650 in our area - all those jumbo int only arms that are about to pop.... wow!

02/05/2008 11:23 PM

by Lewis Poretz - Open Mortgage - Mortgage Banker

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