Rate Hike Leaves Refinancing Rates Low And Steady

The Federal Reserve on Wednesday raised interest rates for the sixth time since last June, as policy-makers continued their efforts to make sure a strengthening economy does not trigger unwanted inflation.

Short-term interest rates to 2.5 percent -- an increase of 25 basis points

Applications Rise
The Market Composite Index, an overall measure of mortgage applications, rose from 658.1 to 706.4 on a seasonally adjusted basis during the week ended Jan. 28, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

Wednesday's Fed move allowed Treasury yields to remain steady and mortgage rates followed their lead.Home refinancing gains full sway as homeowners prepare for home maintenance projects, remodeling, landscaping vacation season. Interest rates for home refinancing are at a significant low.

Borrowers are cautioned to think twice regarding using the equity in the home to payoff unsecured debt. If you truly cannot afford the it or their is significant risk you could be heading in the direction of foreclosure. That said consider another route. Invest 50% of the funds in something that will bring in a return of income. Opt for a less risky loan deal. Reduce the risk and save your home.

Refinancing and Todays Foreclosure Issues

15-year, fixed-rate mortgages, a popular option for refinancing, dipped. Refinancing averaged 46 percent of all mortgage applications. Fixed 30-year mortgage rates averaged 5.58 percent last week, excluding fees, down 6 basis points from 5.64 percent the previous week.



Consumers opted for mortgage refinancing to lower monthly payments while reducing current interest rates. Many opted to get cash back. This option can add a significant financial burden if the borrower becomes strapped with more debt. Borrowers are encouraged to reduce the risks associated with increased debt such as losing their homes.



Foreclosures have increased 43% largely due to taking on too much credit card and mortgage-related debt. For those seeking to avoid or stop foreclosure The Mortgage Loan Search Financial Network provides detailed information and access to resources than can help. Read the 6 Steps to Stopping Foreclosure at http://www.bcpl.net/~ibcnet/

Rates Dip - Money Saved

The Mortgage Loan Search Financial Network reports an increase in mortgage refinancing over the past three business days.


Applicants are seeking to lower monthly payments, reduce current interest rates with a view to saving money over the life of the loan and get cash back .


15-year, fixed-rate mortgages, a popular option for refinancing, dipped. Refinancing made up 46% of all mortgage applications.


Despite a decline in mortgage rates to the lowest level in several months. Fixed 30-year mortgage rates averaged 5.58 percent last week, excluding fees, down 6 basis points from 5.64 percent the previous week.


Consumers are cautioned to watch out for heavy fees and avoid more debt than the budget can handle when opting for cash out refinancing loans. Home foreclosures are on the increase due to borrowers taking on too much cash.


Still ones interest rate and monthly mortgage payments can be a good way to save money for a rainy day.

Rates Drop Approvals Jump

Mortgage rates drop today while mortgage application approval rises. While new homes sales for December came in far below expectations the year ends with record sales for new homes.


Federal Reserve policy-makers are likely to keep bumping up short-term interest rates this year, a defense against an inflation flare-up now that the economic expansion is on firm footing. Experts predict a quarter-point, short-term interest rate hike tomorrow by the Federal Reserve.

Bad Advise Regarding Shopping Mortgage Rates.

Bad Advise regarding Shopping Mortgage rates.



I recently read an article that started off saying that encourage a person contemplating home financing to shop rates is bad advise. Say What? When you consider that recently overnight rates dipped and that 30 year fixed-rate mortgage averaged 5.67 percent in the week ended Jan. 20, down from last week when it averaged 5.74 percent, I say keeping an eye on rates is a big deal. Shopping rates means becoming aware of what the current rates actually are.



True bad advice is easy to give. But When a very popular MSNBC financial expert wrote an article, published in Yahoo's financial section, which implied if your FICO score is lower than 600, you can expect to pay an extremely high rate of interest on your mortgage, well the truth is the truth. Just don't settle for it.



I do appreciate the writers point saying if you have challenged credit, don't let any "professional advise giver" imply, that you can expect to pay a 9% interest rate on your mortgage. But rate watching is essential to finding a good deal.



The writer goes on to say that little pre application work, you can in fact have a 500 to 600 FICO score and get just as nice an interest rate as someone with a 680 to 750 FICO score on a standard 30-year conventional fixed loan.



But here is the contradiction. He adds that 50% of higher interest rate home buyers could have qualified for a lower interest rate conventional loan product. What? Now we're back to shopping rates? Yes we are.


Your wrap up tells it all. You say to credit challenged home buyers, you can use the FHA loan program to buy your home for far less than any alternative loan program available. Your closing costs typically will be higher, however, your rate will be equal to the prevailing conventional mortgage rate. Here you imply that one should by all means compare rates to what is on the market.



You even go so far as to say opt to pay higer closing costs to get you hands on lower rates. Good advice but what a contradiction. You say shopping rates is a bad idea yet your whole focus is on buying a lower rate.



Folks, focus on your rates and do whatever it takes to get a good one.

Where Are Mortgage Rates Headed

Overnight and into the early morning mortgage rates should hold at their lower levels.



a Fed official said that while the Committee depends on economic data for guidance, he believes that accommodation can be removed slowly, which is "Fed speak" for gradual rate increases.



The Federal Reserve's accommodative monetary policy is generating "excessive risk-taking" in the financial markets and possibly fueling speculative demand for single homes and condominiums, according to some members of the Fed's interest rate-setting group.



The Market Composite Index, an overall measure of mortgage applications, fell from 677.4 to 605.7 on a seasonally adjusted basis during the holiday week ended Dec. 31, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

Home Equity Loans Gain Attention Over Refinancing

While the economic expansion continues to broaden, inflationary pressures are sending interest rates up.



The demand for mortgages declined during the week ending November 19, 2004, with the MBA index decreasing by 5.7% to 715. Both the refi and purchase components of the index fell. MOrtgage activity appears to have increased according the Mortgage Loan Search Network at http://www.mortgageloansearch.cc -



Consumer appear to be opting for home equity loans and cash out mortgage refinancing programs. Consumers seem to see this as a way to acquire funds for seasonal purchases and to cut down personal debt.



The greenback remains vulnerable. Clear path to further declines in the dollar.



Freddie Mac announced new maximum loan limits for next year. They said that they will purchase loans for single family homes up to $359,650, a sizable increase from this year's $333,700. Fannie Mae will likely follow suit in the next day or so. This would mean that borrowers can avoid jumbo rates for loans up to $359,650, which is approximately .375 of a percent higher than conforming rates.