Home mortgage rates have been stunningly low for years now, and they recently reached a new record low. While last week’s rate of 2.92 percent on a 30-year fixed-rate home loan was impressive, this week’s rate of 2.9 percent breaks records. These low rates have continued to spur homeowners to refinance and to lock in more competitive financing terms.

In fact, over the last week, the number of new applications for refinance loans increased by 2 percent. Despite this increase, the total number of new applications for home loans declined by 1.2 percent over the previous week. Currently, 72 percent of all new mortgage applications are for refinances.

The interest in home loan refinances is linked to excellent terms for government-issued home loans, including FHA and VA refinance loans. Despite the short-term increase in refinance loans, however, a long-term view indicates that refinancing activity has decreased. Consider that 89 percent of new mortgage applications were for home loan refinance requests only a year ago.

While excellent loan terms for refinances are available, some homeowners have trouble locating the best terms or qualifying for them. One reason for this is because lenders generally will raise rates when they are inundated with new loan requests. This is a natural way to slow the volume of new applications. As volume decreases, lenders will slowly lower rates.

For borrowers who are searching for the most competitive interest rate available, thorough research may be necessary. In fact, experts suggest that today’s homeowners obtain at least five quotes from leading lenders before deciding on a loan program. Other factors also play a role, such as the applicant’s credit scores. The best rates are traditionally reserved for applicants with excellent credit.

Contact one of our loan consultants to learn more about this program.

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