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Mortgage Refinance Applications Surge
From California To New York, Savvy Property Investors Are Using
Refinance Mortgages To Get What They Need
By The Mortgage Guy / MortgageLoanRequest.com
Dictionaries define it accurately when
they define the word surge:
surge (s๛rj)
v. surged, surg·ing, surg·es :
(1) to rise suddenly to a higher amount or value <the real estate
market surged to a record high> (2) to improve one's performance
suddenly, especially in bettering one's standing in a competition <the
local property market is currently surging).
From coast to coast, this is exactly what is happening to the American
property market, it is surging. While loan applications
remain unabated, the most popular application being filed is the one for
refinancing.
Taking advantage of historically low interest rates, and a feverish climate
of lender's competition for clients, Americans are acquiring real estate
like never before.
The Mortgage Bankers Association has just recently
issued a report specifically targeting this phenomenon. They report that
the current applications index rose 6.5 percent from the week of June
3rd's level of 709.1, to 755.5 this week. What with the 30-year interest
rate averaging 5.62 percent, it is no wonder this report did not show
any other results. While refinancing remains as it does (41.2 percent
of all applicants as of the end of May this year), applications specifically
for adjustable
rate mortgages (ARMS) has dropped off a bit from 33.3 to 31. 7 percent.
Due to climbing property values, many applicants are seeking to draw
on the now higher levels of equity in their homes, by refinancing with
HELOCs.
However, all look to reap the future rewards of the savings that will
be derived from the low rates currently offered across the board. Currently,
this is the highest level for mortgage refinance applications since February
of this year.
Home sales have also been encouraged by improvements in the labor market.
With more people working, the economy is stimulated, thereby resulting
in real estate sales falling in step with these trends. The number of
new homes being built has also increased to such levels, that in many
parts of the country people are finding it hard to locate the raw materials
they need for new home construction. This has caused many home owners
to reconsider new construction as an option. Instead, many are now choosing
to refinance their current mortgage and stay put for a few more years
so that they can bank the money they are saving from refinancing at a
lower rate, and to establish more home equity. By choosing this path,
they know they will have more to contribute towards their new home's construction
when its time to build.
With the continuos down trend in interest rates, it is very unlikely
that the real estate market will be cooling down for any time in the near
future. Smart property investors are refinancing and putting the savings
back into their bank accounts rather than making their lenders' more wealthy.
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