Many homeowners now refinance faster and lock lower rates than borrowers did just a few months ago.
Mortgage rates saw a slight uptick late last week, but it could mean good news for refinance applicants – as counter-intuitive as that may sound. Slightly higher rates mean shorter wait times and lower costs.
Stubbornly Low Rates Despite Positive Economic News
It appears almost nothing can move rates out of 13-month lows. Positive economic reports late last week should have moved rates more than they did. Rates ended higher for the week, but are still at some of the lowest levels of the year.
Today, mortgage lenders are quoting rates in the low 4% range for a 30-year fixed. Fifteen year loans are in the low 3s.
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Current 30-year mortgage rates are about 1% below the average rate of 5.17% since 2004.
Market Movers Last Week
Nonfarm Payrolls (NFP) was the market mover last week, and it should have done more damage than it did. The report tallies the number of added jobs during the previous month. This report showed 288,000 jobs added for June, the latest in a 5-month string of strong NFP numbers.
To top it off, the unemployment rate fell from 6.3% to 6.1% – the lowest since 2008. And one other milestone: the Dow reached 17,000.
These numbers indicate a stronger US economy which should send rates much higher. But that didn’t happen. International investors sought US bonds, creating demand for mortgage-backed securities which kept rates low.
Homeowners seeking the popular FHA streamline refinance or any other refinance type will benefit from today’s low rates.
Slightly Higher Rates can Save Refinance Borrowers Money
The insignificant rate rise last week might be good news for refinance applicants. Fewer borrowers rush to refinance when rates rise even slightly. Negative news headlines tend to discourage homeowners from applying for a refinance.
Fewer customers make it possible for lenders to close the loan faster. Refinance borrowers can now lock for a shorter period of time, which yields a lower rate.
Lenders offer locks in 15-day increments. Each additional 15 days costs the borrower more money. A 60-day lock rather than a 30-day could raise a borrower’s rate by 0.25%. According to Ellie Mae, it takes just 39 days to close a refinance. Last July, it took 48 days to close, and in January 2013 refinancing took 55 days.
Today’s quick refinancing lets a borrower to lock for 30-days instead of 45 or 60. The savings are significant. A quarter of a percentage point will save a borrower $13,000 over 30 years on a $250,000 loan.
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Check Today’s Refinance Rates
Low rates and shorter lock periods mean a great opportunity for today’s refinancing households. Check today’s rates and lock in your refinance. Eventually the factors that suppress mortgage rates will dissipate. Rates will rise to normal levels – somewhere around the 5% to 6% range.
Take advantage of today’s refinance rates that are solidly below these levels. Rates rise without notice and change daily. The best way to secure a rate is to get a personalized quote and lock in.
