Humasan? Real Estate Blog: Throngs attempt to refinance

Florida is among the nation?s leaders in the refinancing boom.

The number of Floridians applying for a lower interest rate on their home jumped 152 percent in July, compared to the same period last year, a national survey found.

Only Nevada and Michigan had a higher rate of increase of homeowners trying to refinance homes while interest rates are at historic lows, according to the survey by the Mortgage Bankers Association.

What is helping many Floridians: Federal government programs, the association reported. The recent HARP 2.0, for example, allows regularly paying owners with Fannie Mae or Freddie Mac loans, to refinance even if their home is worth less than its mortgage.

?Certainly, the recent program changes to HARP are very beneficial for underwater homeowners in Florida,? said U.S. Treasury spokeswoman Andrea Risotto.

Lenders usually won?t give a new loan unless homeowners have some equity in their home, said Gregory J. Burie, a financial planner and senior vice president of Morgan Stanley Smith Barney in Boca Raton.

But even some underwater Florida owners who aren?t covered by HARP 2.0 are able to refinance: They pay down their old mortgage to have enough equity for a new loan, said Malcolm Hollensteiner, director of Retail Sales at TD Bank.

?It?s been unheard of before, but people want an all-time low interest rate,? he said.

So they?re willing to supply cash to lower what they owe on their home in order to get a lender to give them a new loan, said Hollensteiner.

Many ?fence-sitters? recently have applied to refinance because they think the interest rates have hit bottom, Hollensteiner added. Interest rates lower than 3 percent on mortgages haven?t been seen since agencies began recording the average weekly mortgage rates, he said.

However, recently rising interest rates may be discouraging others from trying to refinance.

In fact, refinancing applications throughout the nation dropped 7 percent last week as interest rates continued their upward climb, the Mortgage Bankers Association reported.

This week, the nation?s average 30-year fixed rate increased for the fourth week in a row to 3.66 percent, up from a historic low of 3.49 percent in late July, Freddie Mac reported. Fixed rate 15-year loans also were up this week to 2.89 percent, an increase from last month?s record low of 2.8 percent.

Still, the rates are a bargain, said Jim Flood, regional manager of Supreme Lending in Plantation.

TD Bank?s Hollensteiner added that now is a traditionally slow time as families are taking vacations or getting kids back in school.

Refinancing applications will pick up after Labor Day, he predicted.

Homeowners just need to do the math before they apply, financial planner Burie said.

?As always you have to determine how long you will be in the house and how long it will take to recover all the closing costs,? he said.

Make sure you get estimates of closing costs before you sign on the dotted line for a new home loan.

Source: the Sun Sentinel (Fort Lauderdale, Fla.), Donna Gehrke-White, Sun Sentinel. Distributed by MCT Information Services.

Source: http://www.humasanblog.com/2012/08/throngs-attempt-to-refinance.html

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