Tap The Market As Mortgage Rates Are Low

By Jerry, on July 22, 2009

The mortgage market was in doldrums following the subprime mortgage crisis. More and more borrowers were defaulting on their mortgage payments due to the liquidity crunch. Such was the condition of the mortgage market in United States that the government had to intervene and rescue the mortgage market from further upheavals. To address the needs of the homeowners, President Obama introduced the Making Home Affordable Plan that raised hopes for some homeowners.

However, it failed to give the desired results. Financial experts are of the opinion that Obama’s program is great from the theoretical point of view. But when the theory is applied, it fails to do what’s intended. Homeowners are utterly confused about the eligibility criteria. Not many homeowners are able to take advantage of the program and statistics reveal that more than the number of homeowners that are being helped, more are being turned away. There is a wide prevalence of blame game, and no one knows who is to be blamed for such a mess.

So, how will you make the mortgage market work for you under such circumstances?

Take Advantage of Historically Low Mortgage Rates

Now is perhaps a good time to refinance your existing mortgage, or take a plunge and become a homeowner. As of July 21^st 2009, the mortgage rates are low (as per historical standards). Owing to low mortgage rates, home buyers are returning to the market. As per reports furnished by  the Mortgage Bankers Association (MBA), the Refinance Index escalated 17.7% (seasonally adjusted).

According to reports made available by National Association of Realtors, the Pending Home Sales Index increased by 0.1%. Although the escalation was very small, it has shown a steady increase over the past few months. And to set a trend, the figure has to stabilize at least for a period of 3 months.

What are the current mortgage rates?

• For a conforming 30-year mortgage, the average rate increased from 5.20% to 5.34%. In case of conforming 15-year fixed mortgage, the rate increased from 4.72% to 4.80%.
• Rates for home equity loan (10-year) dropped from 7.616% to 7.612%. And rates for 15-year home equity loan decreased from 7.742% to 7.737%.

Note: You can follow this guide to help you find the best mortgage rates.

If you have cash at your disposal, make use of the prevailing mortgage rates that are at an all time low. Financial analysts say that this is essentially a buyer’s market.

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Jerry is a professional writer who has been writing various finance related articles. He is an active participant in MortgageFit forums. He is well known for writing informative posts in the forums. Information provided by him has helped many. He is also involved in various community activities in MortgageFit.

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