A Little Less Conversation, A Little More Action Please!

On September 22^nd, mortgage rates hit their lowest marks ever!  30 year fixed rates were BELOW 4%; shorter terms were even lower.  Naturally, one would assume that mortgage broker’s phones would be ringing off the hook the following week from people looking to refinance, right?  RIGHT?

As it turned out, refinance applications decreased 5.2% in the last week of September compared to the previous week (according to the Mortgage Banker’s Association).  What gives?  Why are applications going down when rates are this low?

In my opinion, many homeowners are simply not applying because programs are not available to them.  Our country’s lawmakers know this, and have been talking for months about how to solve the problem.  I believe the solution to be fairly straightforward; expand the Home Affordable Refinance Program (HARP), a government-created refi program in 2009 that has been fairly successful since its inception (read my April 2009 post for more details about the program).  A growing group of Senators agree with this, and wrote a letter on October 11th to top officials encouraging such a policy improvement.  President Obama also concurs, as he recently noted in a speech to Congress that the average refinance would “put $2000/year in a family’s pocket.”  This savings, mind you, is more than double the amount of what the current Social Security payroll tax relief is saving average American families; clearly making refinances more widely available to homeowners without equity could be a powerful way to help families and our economy at large.  Let’s hope all this conversation turns into a little more action in the near future.  You can surely count on me to keep you informed of positive updates.

With that being said, however, please don’t assume you can’t qualify for a refinance.  If you haven’t pursued your refi options yet, please give me a call and I’d be happy to chat about your situation and what refinance options may be available to you.