Freddie Mac reported that low mortgage rates are providing more opportunities of refinancing among homeowners. This means they’re negotiating with their mortgage provider to lock in lower rates, paying some more upfront to secure affordable monthly payments for the long-term.
Current rates take a dip
According to Freddie Mac, the 30-year fixed-rate mortgage averaged roughly 3.4 percent the week after the Labor Day holiday. This is down from the previous week and significantly below the percent reported one year ago at this time.
“Lower mortgage rates are causing more homeowners to refinance.”
Furthermore, the 15-year FRM averaged around 2.7 percent, down year-over-year. The trend as of late has been decreasing rates, and that has certainly helped out homeowners.
“As mortgage rates continue to range between 3.41 and 3.48 percent, many are taking advantage of the historically low rates by refinancing,” explained Sean Becketti, chief economist for Freddie Mac. “Since the Brexit vote, the refinance share of mortgage activity has remained above 60 percent.”
The big attraction to refinancing is related to the interest rate. In simple terms, you can exchange your existing mortgage for one with a lower rate or different terms, like going from a variable rate to a fixed one. Of course, you should talk with a trusted mortgage professional beforehand to find out if refinancing makes sense for you.
But given the lower mortgage rates right now, it’s understandable that many homeowners are jumping on the opportunity. To top it off, Fannie Mae reported that consumers are optimistic about the state of the housing market, especially when comparing this time to last year. This will likely lead to more homebuyers, a trend also related to the affordable mortgage rates in the market today.