Home Mortgage Refinancing Guide

The median interest rate for financing a 30 year home mortgage loan with zero points fell 1/8 of a point today, to 5 7/8 percent. The 30 year mortgage interest rate with one pre-paid point dropped 1/8 of a point to 5 5/8 percent. The 30 year mortgage interest rate with two prepaid points dropped 1/8 of a point to 5 3/8 percent.

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Home improvement projects come in all varieties: from simple fixers that breathe life into a home to major remodeling that involves gutting a home and changing the floor plan. The reasons for remodeling are as different as the projects that you can undertake: add a room, update a kitchen, or improve the energy efficiency of your home by adding new doors and windows. The housing boom of the past years has extending beyond just the purchase of homes. With low interest rates people are putting money into their homes to improve their comfort, and safety as well as to protect their investment. One way to do this is a new mortgage option that allows borrowers to renovate their homes.

Renovation loans give homebuyers some options when it comes to considering homes that need work. Since many existing homes are at least 25 years old, there is demand for mortgage loans that allow homebuyers to make repairs and improvements. In the past, financing was limited, especially if you didn’t have equity in your home. Today, there are choices when refinancing a mortgage that allow owners to finance home improvement projects. The Federal Housing Administration’s 203(k) loan is one of the most popular home improvement loan programs. This loan is used to update or improve a home needing a minimum of $5,000 in essential repairs such as new wiring, plumbing, roof repairs, or structural repairs.

Other renovation mortgage programs offer higher loan limits, allowing individuals to obtain financing for improving the property. In addition to repairs, these loans can often allow financing for luxury items such as swimming pools, hot tubs, and sun rooms. These mortgages are great ways for homeowners to repair and improve their homes. Homebuyers and neighborhoods benefit from the improvements. Investing in your home contributes to your financial well being, as well as the well being of the community.

Mortgage Refinancing - What You Need to Know

Now is the time to refinance your home loan if you’ve been putting it off. Fixed mortgage interest rates declined for the second week in a row. The average 30 year mortgage interest rate dropped from 5.88 percent to 5.86 percent, according to a national survey of lenders. The 30 year fixed interest rate in this survey had an average of .35 discount and origination points. The average 15 year fixed interest rate declined slightly from 5.50 percent to 5.47 percent, while the average jumbo 30 year fixed rate dropped from 6.07 percent to 6.04 percent. The average 5/1 adjustable rate mortgage (ARM) decreased from 5.56 percent to 5.47 percent, and the one-year adjustable rate mortgage dropped slightly to 4.92 percent from 4.94 percent one week ago. Mortgage rates had risen six weeks in a running, from July into mid-August. Now they have gone down for two straight weeks. What’s different now? On June 30, the Federal Reserve raised short term interest rates, and long term rates responded with a sustained rise. The economy seems strong and investors expected a rise in inflation in the long term.

Fixed mortgage rates remain low, as do monthly payments. Six months ago, the average 30 year fixed rate mortgage was 6.15 percent. At the time, the monthly payment on a $165,000 mortgage was $1,005.23. With the average rate now 5.86 percent, the monthly payment on the same $165,000 loan is $974.46.

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Mortgage rates were little changed last week. Fixed 30 year mortgage interest rates dropped to an average of 5.78% compared with 5.79% the week before. While the 30 year interest rate is below the 2005 high of 6.08% from March, it matches its level of last summer. The National Association of Realtors also reported that the median home price is $218,000, up 14% from a last summer.

Government reports show home prices are up more than 50% over the last five years, fueled by the lowest interest rates in decades. Fixed 15 year mortgage interest rates last week averaged 5.41%, up from 5.40%. Rates on one-year adjustable rate mortgages dropped to 4.84% last week from 4.85% one week before. Adjustable rate mortgages’ share of activity stood at 28.1% of total mortgage applications taken last week, down from 28.9% the week before.

With adjustable rate mortgages, lower payments allow individuals to buy homes they may not be able to afford with a fixed rate mortgage loan. In report sales of homes dropped 2.6% in July as the rate of both condominium and single-family home buying slowed across the country. Despite the drop, this summer’s sales are the third highest on record.

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The number of people applying for home mortgages loans decreased last week, with mortgage activity falling for the first time this summer despite steady interest rates, an industry group said today. The Mortgage Bankers Association said its adjusted index of loan applications dropped .7 percent to 756.2 for the last week. MBA’s buyer’s index, a gauge of home purchases, fell 2.2 percent to 488.4. Summer factors may have been the reason for last week’s decline in loan demand. People are be more focused on their vacations and sending their children back to school this time of year.

Fixed 30 year mortgage interest rates dropped 1 basis point, or 0.01 of a point, to a value of 5.78 percent, compared with 5.79 the week before. While the 30 year rate is below the 2005 high reached in March and above the 2005 low late June, it matches its level a summer ago. MBA forecasts that 30 year mortgage interest rates should hit 6 percent by years end and 6.5 percent by the end of 2006 slowing value appreciation of homes next year. Fixed 15 year mortgage rates last week averaged 5.41 percent, up from 5.40 percent the week before. Rates on one year adjustable rate mortgages dropped to 4.84 percent last week from 4.85 percent the week before.

The housing market is sending mixed signals because on one end it appears to be cooling down. Sales of new homes showed strength, jumping to a record high this summer, up 6.5 percent over June. Tuesday, the National Association of Realtors reported sales of homes dropped 2.6 percent in July. Economists watching the impact of housing on the economy place more emphasis on new home sales than existing home sales because it triggers more economic activity, including construction and the purchase of new furniture. Tracking mortgage interest trends over the past summer, the MBA said it moving average of loan applications rose .1 percent higher to 753.7 from 753.2. The purchase index’s average rose .2 percent to 495.3 from 494.4. The mortgage refinancing index’s four week average dropped .1 percent to 2256.6 from 2258.2.

Mortgage Calculator - What You Need to Know