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Mortgage rates have been dropping throughout the year, and now they are at an all-time low. According to Daily Real Estate News on RealtorMag.com, the total number of mortgage applications is 41% higher than this time last year! That is a huge increase. If you are a qualified buyer, you could get a rate as low as 3.625%.
Refinancing has become popular with the drop in interest rate. The refinancing applications have increased 22% from week-to-week and are up 63% from last year at this time. Home purchase mortgage applications are down on a week-to-week basis, but are up from last year at this time. With mortgage rates being the lowest since 2013, it is no wonder why applications have increased.
The Federal Housing Administration (FHA) has also reduced their Mortgage Insurance Premiums (MPI). FHA is a mortgage insurer who collects a percentage to secure the loan. The Mortgage Reports shows how the rates have gone down for the first time since 2001. When the “bad loans” surfaced, the FHA had to raise their rates gradually up to 1.35% annual MPI and 1.75% up-front MPI. It is being reduced to .85% for 2015. This has also caused an increase in refinancing applications.
Home values are also increasing. This causes a jump in refinancing applications because those who didn’t have enough equity in their homes to drop their Primary Mortgage Insurance (PMI) now do. Removing PMI from a mortgage can decrease the monthly payment.
For more information on current mortgage rates, visit Bankrate.com. We at Alain Pinel Realtors are here to help you with all of your real estate needs! If you are unsure what your options are, call Matt Tenczar at (408) 605-8124 or contact me via email. You can also visit us at our website for available listings and additional information.