Home Loan Refinance Online

Mortgage applications dropped last week, refinancing down again

Mortgage applications decreased 5.1 percent from one week earlier as the refinance index continued its decline for the fourth straight week, hitting its lowest level since April. 

Purchases decreased 2.6 percent and refinancings were down 6.2 percent for the week ended July 8, even as home loan rates continued to drop, the Mortgage Bankers Association reported on Wednesday. 

The refinance index, which is adjusted for the July 4 holiday, hit its lowest level since April 29.

On Tuesday, Sen. Barbara Boxer (D-Calif.) said that along with Sen. Johnny Isakson (R-Ga.), she will push a bill to spur refinancing for those homeowners with underwater mortgages whose payments are up to date. 

The refinancing market has remained sluggish despite low mortgage rates because of the growing number of homeowners who are in a negative equity situation. 

The Boxer-Isakson legislation would remove barriers — such as high fees — that will help about 2 million homeowners with loans through Fannie Mae and Freddie Mac refinance.

"This bill will provide immediate relief to homeowners who have been paying their mortgages," Boxer said.  

The four-week moving average, a less volatile measure than the weekly average, is down 4.7 percent. The same average decreased 1 percent for purchases and 6.3 percent for the refinancing.

The refinance share of mortgage activity decreased to 65.6 percent of total applications from 66.4 percent the previous week. 

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.55 percent from 4.69 percent.

A 15-year fixed-rate mortgage decreased to 3.68 percent from 3.79 percent.

The Home Affordable Refinance Program: Home Loan Modification Vs ...

The United States is going through one of the worst economic periods in history. Unemployment rates are skyrocketing, home values are plummeting, personal incomes are slumping and home foreclosure rates are through the roof. Millions of responsible homeowners are having difficulty with their monthly mortgage payments and are at risk of foreclosure. However amongst the gloom and despair there is hope. Economists and politicians alike have realized that one of the biggest keys to turning around the US economy will be to support housing prices. In order to support housing prices, steps were needed to help homeowners avoid foreclosure and stay in their homes. In order to do this, mortgages would need to be refinanced or restructured to lower monthly mortgage payments to the point where troubled homeowners could afford them. Loan modification and The home affordable refinance program are helping hundreds of thousands of homeowners prevent foreclosure when they can't pay their mortgages. Which one is best for you depends mostly on who backs your loan. To learn about your loan insurer, call your lender and ask. Most loans are insured by the FHA, Freddie Mac, or Fannie Mae. None of these three organizations are actual lenders, but they insure the loans and guarantee the full amount of the loan. Doing this lessens the risk for lenders and helps borrowers get lower interest rates. Under the home affordable refinance program , the modified loan is extended over a five to forty year period, under which the homeowner pays lower monthly mortgage payments, and the total interest is lowered according to the homeowner's financial hardship. The rate the homeowner pays is fixed up until the end of the five year period, where ballooning to make up for the lower payments can occur. The rise at the end of the term does not mean that the overall mortgage has risen over the five years, rather that the lender needs to catch up with how much the homeowner owes. For homeowners who do not qualify for Obama's Home Affordable Loan Modification Program due to not being in hardship in the eyes of their lender can attempt to get refinancing under the new Home Affordable Refinance program, which is similarly targeted towards four to five million people. However the Refinancing Program is targeted towards the homeowners whose property value is steadily falling. The two programs, the loan modification and refinancing, while milestones in availability, are useful for entirely different scenarios. Lenders are slowly opening up to accepting loan modification applications under the new loan modification plan, but it is not instant, as entirely expected. Under the new plan for loan modification, lenders must take a financial hit since the interest rates are lowered, and there is no guarantee that every homeowner will pay on time every month, so the $1,000 bonus is not a sure thing. The system will work itself out in time, but for now there is doubt on the lender's side and great need on the homeowner's side.

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