Falling mortgage rates provide strong incentives for those considering buying homes or refinancing their existing mortgage loans. With rates typically trending higher during spring and summer, it's unclear how long lower rates will last.
The good news keeps getting better for home buyers and refinancing homeowners as average combined mortgage rates fell again during the week of May 17 on continuing poor economic news. HSH Associates reported falling rates across the board, with mortgage rates for 30-year fixed rate mortgages (FRM) averaging 5.21%, 6 basis points (0.06%) lower than the previous week's average of 5.27%. Average rates for a 15-year FRM also fell 6 basis points, to 4.62%.
Rates for a 5/1 adjustable-rate mortgage (ARM) present a great deal for those seeking affordable monthly payments after decreasing from 4.30% to 4.24%. With the busy spring home buying and remodeling season upon us, these low rates are welcome news for many prospective and existing homeowners.
Refinancing for Remodeling Your Home
When your home starts showing its age, updating and remodeling can add value while providing the latest conveniences. Installing energy-efficient heating and air conditioning systems, windows, and appliances can help cut utility costs. Refinancing for extra cash can fund home improvement projects; today's low mortgage rates help with affordability.
Mortgage Refinance Options Depend on Home Equity
Home equity--the difference between your home's current value and the balance owed on any existing mortgage loans against it--determines your ability to refinance. Conventional lenders typically won't refinance for more than 80% to 90% of your homes current value. The Federal Housing Administration (FHA) offers a home mortgage program that provides funds for purchasing or refinancing your home (even if your existing mortgage is not an FHA loan). Contact mortgage lenders to determine options and compare home loan features and pricing.
Buying and Borrowing Season Heats Up: Avoiding Pressure
Don't fall for pressure tactics and unsolicited offers for mortgages. The only reason for refinancing is that you wish to do so. Taking time to evaluate and compare mortgage quotes can potentially save money and prevent misery associated with taking the plunge on a shady mortgage deal.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.