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Rising Rates Contribute To Home Refinancing Jitters
(PRWEB) May 9, 2004--The Mortgage Loan Search network, a rate
finding search engine, reports a marked decline in mortgage
search as borrowers shopping for lowest rates wonder if they've
missed the boat. Thus the bargain loan hunting jitters begin.
The 30% decrease in network activity contrasts with the previous
month as borrowers scurried to find low rates. At that time
mortgage applications rose from 748.0 to 780.9 on a seasonally
adjusted basis during the week ended April 30, according to
the Mortgage Bankers Association's Weekly Mortgage Applications
Survey.
It's no wonder activity has slowed considering the predictions
of an inevitable rate hike began to take on a more prophetic
tone as rates slowly began to rise and the recent Fed meeting
confirmed plans to hike rates in the near future gradually
but surely.
| As
interest rates rise from previous 5 percent lows to over
and above 6% borrowers seeking to save thousands in loan
costs by refinancing their home loans are now confronted
with a greater challenge to secure a good deal. |
As
rates rise competition for consumers seeking loans is expected
to get increasingly stiff according to Mark Askew, a representative
of Financial Marketing Network, Inc. a loan leads supplier
and publisher of Internet based financial resources.
"This could be a good thing or a bad thing for borrowers
and mortgage rate shoppers depending on the deal put on the
table", Mark said.
For example many lenders in the Internet lending marketplace
are offering attractive lures such as loan approval in as
little as 24 hours. Low and no interest loans including home
equity loans. Programs that promise to save $200-$500 a month.
Pre-Approval in 48 hours. No cost free mortgage rate quotes.
Refinancing for the self-employed and financing programs for
bad credit situations.
Of all the more attractive financing programs offered "no
cost" and "no point" loans are gaining popularity.
The reason is obvious. Loan shoppers want to save money, especially
up front. "No cost" financing may appear to do just
the ticket to that end.
The reality is the borrower has agreed to the higher interest
rate in exchange for no points and/or no closing costs. On
average, for a 30-year fixed rate loan, every point changes
the interest rate by 1/4%.
| As
interest rates rise borrowers seek to save thousands in
loan costs. |
Often
the borrower gets a higher loan than originally applied for
and the broker subsequently gets a higher commission. No wonder
in the first quarter, 43% of the homeowners who refinanced
their homes got a mortgage at least 5% larger than the original
loan.
Therefore the Mortgage Loan Search Network recommends that
it's users request that a specified fee be negotiated before
formal application.
To that end mortgage rate shoppers are pulling out all the
stops to find the lowest rate possible and using the Internets
deal search and seizure powers to find the best loan deals
available. One such site, www.mortgageloansearch.cc boldly
advises rate shoppers not to settle for the first quote they
get when applying for free rate quotes online. And when a
quote sounds attractive get it in writing.
That done consumers would do well to lock in rates as soon
as possible but no so soon that the loan fails to close before
the rate lock expires.
Their are still reportedly attractive interest rate offers
and bargain loan deals online. This is expected to continue
as competition to win borrower business increases.
As interest rates rise borrowers seeking to save thousands
in loan costs off-set the stress of finding and securing a
good home refinancing deal by being patient, cautious and
proceeding into a loan agreement carefully.
More information at http://www.mortgageloansearch.cc/
.
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