The 30-year fixed-rate home loan dropped to 5.32% this week from 5.42% last week. Although it is still above the lowest rate early this year which was 4.78%, the interest rate this week is still lower than the last year average rate 6.35%.
This is the fifth week in a row that the mortgage rate has climbed up over 5% which affects greatly to home loan demand. Mortgage application dropped 19% from one week ago while refinancing activity plunged to 46.6% as reported by the Mortgage Bankers Association.
Many homeowners are currently concerned about their estate and the current mortgage rate slows down refinancing activities by struggling borrowers. Borrowers took advantage of the low interest rate early this year especially those whose home value has dropped significantly. But as the current rate is now above 5%, homeowners have lost interest in refinancing although they desperately need help with their current mortgage payment.
There are two different types of financial help that could save your home which is through refinancing or modification. The modification option can help those who are struggling to keep their current loan. If you are already behind in mortgage payment, modification loan will also be helpful. If you have anticipated significant increase in your mortgage payment, or have had a significant reduction in income, or if you have experienced some other hardship that makes you unable to pay your mortgage, simply contact your mortgage company or lender. Your lender will be able to lower the amount of the principal owed, lower your monthly payments to 31% of your gross income or extend the length of your mortgage life.
Both the refinancing and the modification program are managed under the federal government’s Making Homes Affordable Program. Note that there are specific eligibility requirements for both of the programs.
If you have lost interest in refinancing your mortgage because of the climbing mortgage rate you still have another option to save your home. Contact your mortgage company and ask for for a loan modification.
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