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WASHINGTON — Declaring “good news” in the midst of an economic meltdown, President Barack Obama on Thursday urged families to take advantage of near-record low mortgage rates by refinancing their home loans. (It’s nice to have a silver lining during this, and perhaps bank your savings – just in case!)
“We are at a time where people can really take advantage of this,” Obama said, seated with a handful of homeowners who have already lowered their bills.
But he also warned people to watch out for scam artists, cautioning, “If somebody is asking you for money up front before they help you with your refinancing, it’s probably a scam.” (We whole heartly agree with this! Only work with a credible lender with a long track record & references!)
Rates on 30-year mortgages inched upward this week but remain near the lowest level in decades, allowing borrowers with strong credit and stable jobs to save money if they refinance. (What is also exciting is that there are NEW programs available for homeowners to refinance even if they have no equity due to a softening real estate market. It’s worth having someone run the numbers for you – I’m happy to be that person.)
The average rate on a 30-year fixed-rate mortgage rose to 4.87 percent this week, up from 4.78 percent last week, Freddie Mac reported Thursday. That was the lowest in the history of the survey, which dates back to 1971.
Low rates have sparked a surge in refinancing activity, with nearly 80 percent of new home loan applications coming from borrowers seeking to refinance. Freddie Mac’s sibling company, Fannie Mae, refinanced $77 billion in loans last month, nearly double February’s volume.
Foreclosures and defaults continue to break records. A record 5.4 million homeowners with a mortgage, or nearly 12 percent, were at least one month late or in foreclosure at the end of last year. Last month, the Obama administration launched a new plan to provide $75 billion in incentives for the mortgage industry to modify loans to help borrowers avoid foreclosure. On Thursday, the president encouraged people to take advantage of a government Web site — www.makinghomeaffordable.gov — to see how they can get help.
