Thursday, 4 September 2014

Despite Great Mortgage Rates Refinancing Declines In 2014

Posted at  09:42  |  in  Mortgage

As per mortgage data collected by Ellie Mae, a California based company that after years of positive mortgage refinance market, fewer homeowners are taking steps to refinance their mortgage loans or swap their old loans for new ones. According to a statement by Ellie Mae, 63% of the closed mortgage loans in the month of April, 2014 were to purchase a home whereas a year earlier, in 2013, 58% of the total loans closed were to refinance. They say that this was perhaps the highest percentage of purchase loans that they’ve seen since they’ve started reporting in August 2011 and 2% higher than the previous high of 61% in 2013, October. What is it that is affecting the refinance market that always flourished in the US?

Having said that, the mortgage lenders closed the refinance loans more quickly in the month of April, taking just about 37 days while the purchase loans took to close about 40 days. Collectively, the number of days taken to close averaged at 39 days, the first drop to fewer than 40 days in the history of data brought in by Ellie Mae. However, the company said that this data covers only aggregated date and doesn’t disclose information on specific borrowers or their loans.

Refinance mistakes that you should avoid in 2014

As it is there are very few refinances in 2014 and still if you’re someone who is about to refinance your mortgage loan, make sure you take the right steps so that you end up being happy. Here are some mistakes that you should avoid.

  1. Not shopping for the best quote: Whenever you’re buying something, the most important thing to take into account is to get multiple quotes so that you can compare and contrast only to choose the best one according to your needs. Forget dealing with the company that knocked you first. Don’t be a fool to think that shopping around for mortgage quotes will affect your credit score. In fact, credit bureaus like Fair Isaac Corp believe that one should shop around.
  1. Settling with the appraiser of the lender: You should also avoid making the mistake of settling down with the appraiser sent by the lender. Always speak about the option of choosing your own appraiser, real estate attorney, survey company and other professionals when it comes to closing on your home. Using the appraiser of the lender is indeed a big red flag. Don’t be okay about the people whom your lender chooses to help you with as this is a conflict of interest and the person might not have your best interests in mind.
  1. Not checking your credit score: One of the biggest mistakes is to not check your credit score before refinancing your mortgage. Remember that the lower your score is, the higher will be the interest rates on the new refinance mortgage.
Hence, if you’re a potential candidate for refinancing, avoid committing the above mentioned blunders. Choose the right lender who can give you the best competitive rates.

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Jimmy Simond is founder of he share his immense knowledge of finance in this blog. You can follow him on Google+.

1 comment:

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