Many homeowners refinancing their mortgages as rates fall again

On Behalf of | Oct 18, 2019 | Refinancing

Many homeowners here in Augusta and elsewhere in Georgia may be looking to refinance their mortgages soon. A new report from MarketWatch shows that the yield on Treasury notes declined earlier this month. This caused a chain reaction whereby mortgage rates also have fallen.

MarketWatch’s report shows that the 5/1 adjustable-rate mortgage percentage dropped 3 basis points to 3.35% in just a single week earlier this month. The 15-year fixed-rate mortgage rate went down to 3.05%. This is nine basis points lower from what it was earlier this month.

Their same data shows that the 30-year-fixed mortgage rate just a year ago was 4.90%. Their data shows that it had gone down to just 3.57% by Oct. 10 of this year.

MarketWatch’s research shows that mortgage rates have historically been affected by 10-year Treasury note yields.

That yield on that note, known as TMUBMUSD10Y, was reduced by 10 basis points during the past 30 days. It’s had an overall decrease of 100 points during these first 10 months of 2019.

Data compiled by the Mortgage Bankers Association shows how much of an impact that this decline in mortgage rates has had on homeowners.

It shows how the number of borrowers who have sought to refinance their homes has increased by 163% since last year. The drop in interest rates has resulted in a 10% increase in loan origination as well.

Data compiled by the lender Freddie Mac shows that nearly 46% of their loans in 2019 were extended to first-time buyers. This marks the highest rate of first-time homeowners taking out loans in nearly 20 years.

Refinancing the mortgage on your loan isn’t the right decision for everyone. While it may seem attractive to try to secure a lower interest rate, you should know the downsides to it as well. An attorney can advise you of what those may be and help you decide whether it’s in your best interest to move forward with the process while the rates are as low as they’ve been in decades.