Mortgage rates fall for the week of September 22, 2014

Posted by  on Sep 29, 2014

The word "meander" derives from the historical name of a river in modern-day Turkey that wanders listlessly and randomly. If we were to need a new term for wandering randomly, we'd probably pick some metaphor based on mortgage rates. For some time now, the rates have presented lots of small gains and losses but very little real movement in one direction or another.

Mortgage rates in detail

This week has been no exception. The average rate for 30-year fixed-rate mortgages (FRMs) ended the week at 4.27 percent, just two basis points down from 4.29 percent seven days earlier, according to HSH.com. Points for these rose to 0.15 from 0.12. That for 15-year FRMs was even more listless, drifting down a single basis point to 3.55 percent, with points also reducing by the smallest measurable amount: to 0.11 from 0.12.

Adjustable-rate mortgages (ARMs) are often the predictably contrarian teenagers of the home loans market, so it was no surprise that the 1/1 30-year ARM average went up -- to 2.76 percent from 2.73 percent. More unexpected was the leap in points for these, which hit 0.26, up from 0.16.

Whichever sort of home loan you're after, our live database of current mortgage rates can help you find the best mortgage rates in your area.

Refinancing still popular

The Mortgage Bankers Association reckons that 56 percent of all applications received were for home refinances during the week ending September 19, the latest period for which data are available. So refinancing remains, as it has for some time, the most popular form of home loan.

Some of that popularity may be driven by people whose mortgages have previously been underwater (where the loan(s) secured by the home is higher than its market value), but who are now enjoying the benefits of positive equity. Just during the second quarter of 2014, the owners of 946,000 residential homes made that transition, according to a report published on September 25 by CoreLogic. In that three-month period, the decline in the aggregate value of negative equity was $38.1 billion.

That great news is tainted only by the number -- 5.3 million -- of underwater home loans that are still out there.

Home refinances with low or no equity

The owners of another 9.4 million homes have positive equity but are regarded as "under-equitied," which means they might not qualify for a standard refinance deal. But, if you're one of them, don't despair.

The federal government's Home Affordable Refinance Program (HARP) is designed to help people in precisely your position -- and some who have a small level of negative equity. However, while many do, not everyone qualifies for this help and you need to check the official website's eligibility criteria before you get your hopes up.

If you are eligible, you can talk to your existing lender to explore your options. But don't stop there. You may get a better rate by shopping around for other mortgage providers.

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