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Mortgage rates fall for the week of October 6, 2014

Posted by  on Oct 14, 2014
 

The average rate for 30-year fixed-rate mortgages (FRMs) tumbled 6 basis points last week to 4.17 percent (with points of 0.14) from 4.23 percent seven days earlier, according to HSH.com. That doesn't quite equal the 15-month record low of 4.16 percent, but it's adrift from that by only the smallest measurable amount.

Other average rates also dropped over that period, with the 15-year FRM falling to 3.45 percent from 3.52 percent, while points for these rose to 0.10 from 0.09. Meanwhile, some adjustable-rate mortgage (ARM) rates also fell -- though less precipitously -- with the 1/1 30-year ARM ending the week at 2.68 percent, down from 2.70 percent. Points for these rose to 0.15 from 0.12.

Our live database of current mortgage rates can help you find the best mortgage rates in your area.

Refinancing as a senior

The Mortgage Bankers Association reckons that refinance applications continue to make up most of the activity in the home loans market. And new research, published last week by TransUnion, suggests that those 60-plus years of age may be responsible for an increasing share of these. The company, one of the Big Three credit bureaus, found that very nearly one in three of those in that age bracket now have active mortgages. That's up from one in four just six years ago.

That rise, remarkable in itself, takes on added significance when you look at the dollar sums owed on home loans by people in that age group. Back in 2005, those in the over-60 age group who had mortgages owed an average of $115,785 on those products. Today, that same figure is $160,120.

Retirees and strategic refinancing

Time was when a retired person wouldn't dream of having a mortgage unless they were in real financial difficulties. However, today's refinance rates, alongside other factors, mean that many mature folk find home loans a useful tool within a carefully thought-through personal finance strategy. As one expert recently noted, one of these "can make every bit as much sense at age 70 as it does at 40."

Clearly, refinancing can be a particularly critical step for a retiree, so it's important to recognize both what your options are and what you need to achieve through the maneuver, i.e., your objectives. For example, a cash cushion can make life much easier for someone on a fixed income, but a cash-out refinancing might add to monthly outgoings. There are a lot of considerations to juggle here, including the likelihood of your staying in your home long enough to justify the up-front costs.

So don't rush into anything. But, when you're ready, your first step is to compare refinance rates as part of the shopping-around process that's the only way to make sure you get the best possible deal.

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