Posted on 01/17/2008 7:34:08 AM PST by reaganaut1
Another mortgage-refinancing boom is under way. But this time around, many homeowners will be watching from the sidelines.
For the first time since 2005, mortgage rates have slipped well below 6%, ending last week at about 5.87%, according to mortgage tracker HSH Associates. Some lenders are offering even lower deals. At these levels, about 37% of homeowners could refinance their mortgages and save money on their monthly payment, estimates investment bank Bear Stearns Cos. As rates drop further -- and some expect that to happen if the economy continues to weaken -- increasing numbers of consumers will find refinancing their existing mortgage worthwhile.
But here's the catch, and it's a big one: Many homeowners won't benefit, either because their mortgage is too big or their credit score is too low. In other cases, falling home prices will make it tough for them to refinance.
As the subprime-lending crisis continues to roil the housing and financial markets, rates for so-called jumbo mortgages -- those above $417,000 -- are now uncharacteristically priced so far above conventional mortgages that refinancing generally makes no sense for homeowners who hold them. At the same time, conventional borrowers who have lower credit scores -- or relatively little equity in their houses -- are finding that they generally don't qualify for the best rates, often negating any expected benefits to the pocketbook.
The result: The big winners will be conventional borrowers with so-called conforming loans -- those eligible for purchase by Fannie Mae and Freddie Mac, the two government-sponsored entities that rule the mortgage market. In particular, borrowers with high credit scores or a large amount of equity already in their home, or some combination of both, stand to benefit, says Dale Westhoff, who heads Bear Stearns's mortgage research.
(Excerpt) Read more at online.wsj.com ...
“There is no “morgage crisis” for people who have not borrowed and spent beyond their means.”
Amen.
...or put a sizeable chunk of equity into their homes.
No down payment loans need to be seriously restricted, IMO.
I’ve got a 30 year fixed at 5.25% ... it may be a while before refinancing makes sense
4.75% here
This doesn't matter to the "interest rates are too high!" gang, whether they're on Wall Street or FR.
Well, not directly - but if you lose your job and your bank goes under due to the aftereffects, there will be. One of the few drawbacks of a free economy is that you can do everything right and still end up paying the price for others' misdeeds.
You can go up to 95% with lender paid mortgage insurance, which really means no PMI. Instead the rate is just bumped up a bit over the basic rate.
Anecdotally, I've only seen two kinds of people get caught up in foreclosure recently: wannabe "rich" people buying too much house for too much money or clueless poor dopes trying to move into middle class neighborhoods and then not paying their mortgages.
I got a 6.25 JUMBO from my credit union.... Best credit union in the world.... Corning Credit Union located in Corning NY.
5.75% on a 30 for me. I will go for a 15 or 20 year if I can get something in the 4’s%.
5.5 here on a 30.........
I do believe eliminated would be a better goal, 10% down plus closing was always the best option for everyone.
Looks like a chickens coming home to roost for the lenders.It is unfortunate that folks that could not qualify for a home loan in the first place, were given loans that they could never repay. It’s just to bad that all of us will have to pay for their bad judgment. No pity.
Just got a 4.99% APR, no closing or fees, 15 year. I am in Alabama.
God help us if the DimRats are elected.
I'm in year 4 of a 15 year note at 4.75%.
Mortgage brokers will have to work really hard to get me to refinance.
If one is liquid OR has a good amount of equity companies are just about begging to lend money to you.
I’ve got a 15 year fixed at 5.25% ... it may be a while before refinancing makes sense.
4.625%!!! Got ya beat!
Currently 6% on a 30 year jumbo.
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