The past month has seen several record lows for mortgage rates. The rates today are still very low at an average of 4.23% for a 30 year loan and 3.38% for a 15 year loan. Many people who are refinancing are choosing the 15 year term. With such low rates it makes sense to choose the shorter term and pay the loan off in half the time saving a lot in interest. The monthly payment amounts are not that different now that the mortgage rates are so low.
Even though rates are at all time lows, the banking industry has not seen a big increase in the refinancing market. There is much speculation as to why, when rates are so low, people are not jumping quickly on board to refinance. Some say that there is anxiety related with the general state of the economy and the future so people are hesitant to refinance. Some feel like the low rates wouldn’t apply to their situation as their credit isn’t good enough. Some have said that because the market value of their house is so low they have very little or no equity. This causes them to not refinance. Others have seen a drop off in their income or they fear a drop off so they don’t want to refinance.
One program that should be looked into is the HARP Home Affordable Refinancing Program. This program helps those with Fannie Mae or Freddie Mac loans who have little equity built up.
Now is the time to look into refinancing. It is better to start the process and find out what is available than to just be anxious and speculate. Shop around. Look at local mortgage lenders as well as national lenders like Bank of America, Wells Fargo, PNC Bank and Chase.