As fixed-rate mortgage averages continue to match or break record lows, borrowers have been inclined to take advantage and refinance their current mortgage.
According to the Mortgage Bankers Association's Weekly Applications Survey, mortgage applications increased 0.9 percent on a seasonally adjusted basis during the week ending July 20 from a week prior, while the Refinance Index jumped 2 percent to its highest level since 2009.
However, the surge in refinancing is not expected to continue as capacity will become an issue in the near future, a mortgage expert told Bloomberg.
"The only way for things to really change is if lenders add a significant amount of capacity back into the system, and I don't see that happening over the short term," Scott Buchta of Sandler O'Neill & Partners LP told the source. "The fear of higher rates has kept the rate of expansion in check."
Refinance activity will also be slowed as the gap between bond yields and new-loan rates continues to wide, according to the news source. The widened gap keeps costs higher and puts a new mortgage out of reach for some borrowers.
This entry was posted on Friday, July 27th, 2012 at 3:07 am and is filed under Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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