Last week, mortgage refinances jumped nearly 47% week-over-week following six straight weeks in which mortgage interest rates dropped, according to data released Wednesday from the Mortgage Bankers Association. In all, there were more than double the number of refinances last week as there were during the same period a year ago, as refinance activity reached its highest clip since 2016.
The monthly prepayment rate — which measures the share of mortgage borrowers who pay off their loan ahead of schedule — jumped by nearly 18% year-over-year to 0.99% in April, according to data released last month by real-estate data firm Black Knight BKI, -0.32% Three years ago, the prepayment rate was much higher at 1.26%.
Who should be considering a mortgage refinance right now? People who bought a home or opened a mortgage in the last 1.5 years are prime candidates for a refinance. Unfortunately, many homeowners may not be aware of that. The general rule of thumb is that the prevailing rates on the market need to be 50 basis points lower than a borrower’s current mortgage rate for a refinance to make sense, said Tendayi Kapfidze, chief economist at LendingTree TREE, -0.70%
And of course, borrowers who didn’t take advantage of the sub-4% mortgage rates available from 2014 to 2017 could also find it financially advantageous to consider refinancing. ‘Stretching out loan payments over an extended period of time could result in paying more interest on the debt over the entire lifetime of the loan, even if it’s at a lower rate.’ —Sarah Mikhitarian, senior economist at Zillow Similarly, if someone plans to move to a new home in the near future, a refinance may not be worth it because the savings are incurred over time.
Property Property Latest News, Property Property Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: MarketWatch - 🏆 3. / 97 Read more »