Fed Keeps Mortgage Rates Low
ByThe Fed announced today that they were keeping mortgage rates unchganged. Refinance loan applications rose respectively due to the demand for distressed homeowners to refinance into a more affordable loan featuring a fixed interest rate. Conforming and FHA lenders have announced tighter lending guidelines for refinancing and home buying.
According to Mortgage Bankers Association, the home mortgage rates rose for the 2nd straight week to 4.92% from 4.88%, based on the MBA weekly interest rate report Home loan applications held relatively steady, too, increasing only .3% on a seasonally adjusted basis. Applications for refinancing represented 75.2% of all applications.
Mortgage refinance rates for a fifteen-year loan maintained 4.33%. These fixed-rate mortgage loans accounted for nearly 20% of refinance mortgage applications in October, Ruth Simon reports in today’s Wall Sreet Journal. That’s up from 9.1% a year earlier and 7.5% in October 2007.
Many loan applicants are interested in the fifteen-year mortgage rates because they have reached such low levels. However, borrowers who are used to a 30-year mortgage payment may suffer from sticker shock, because even with a 4.375% rate, the 15-year mortgages have a higher monthly payment. Mortgage rates have been at near-record low territory for the last couple of months, but the good news for 2010 was received as the Federal Reserve announced they were extend their program in which the government buys mortgage loan securities in the upcoming year.
