Search:

News by Subject
Complete list of specialty news sections.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Mortgage Industry News
Subscription-based news for people who work in real estate finance.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories for your web site or for your RSS reader.

News Archives
Archive of news entries.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Graphs
Directory of lenders, branch operators and mortgage service providers.
home advertise email RSS about us
 
HOT Topics Rates Glossary LO License Search
Consumer Mortgage News
Free mortgage news for current and prospective borrowers from a leading online mortgage industry news publication.



EU Turmoil Creates Refinance Opportunity

A Brexit silver lining? Mortgage rates back near the bottom again

June 28, 2016

By PAUL GORES Milwaukee Journal Sentinel - Tribune News Service


With interest rates already hovering near historic lows -- and then getting kicked down a notch by the "Brexit" surprise -- another chance for homeowners to refinance a mortgage at near-bottom rates appears to be under way.

Even before last week's vote by the United Kingdom to leave the European Union sent rates about one-eighth of a percentage point lower, the Mortgage Bankers Association reported its refinance index was up 7 percent from the previous week, with refinancings accounting for almost 58 percent of all mortgage applications.

The British situation, while awful news so far for the stock market, is an opportunity -- one of many since the Great Recession -- for mortgage borrowers to lower their monthly payments, reduce the term of the mortgage or take out some cash.

Lenders advertising rates of 3.50 percent on a 30-year fixed rate mortgage weren't hard to find Monday, and some offered still-lower rates for shorter-term mortgages.

But rates change often, and no one can say for certain how long the low rates will be around.

"It is very difficult to know how long this downdraft will last," Mark Hamrick, senior economic analyst for the personal finance firm Bankrate.com, said Monday. "If someone is on the proverbial fence about a refi, I'd take a sure thing now over trying to anticipate the future direction of rates, which could rebound."

Brian Wickert, president of Accunet Mortgage in Butler, Wisconsin, said his company saw about a 50 percent jump in refinance loan application volume the week of June 12, then a slowdown last week as it looked like the British wouldn't opt to leave the EU. But the unanticipated vote by Britain sent the rates down a tick to levels from 2012's record territory, he said.

Wickert said he expected "another spike" in refinance applications this week as long as rates stay low.

Worries about the global economy tend to send foreign investors to the relative safety of U.S. Treasuries. The higher demand pushes up prices for government bonds, causing their yields, which have an effect on mortgage rates, to drop. And with the British situation disrupting the global landscape, there is no shortage of economic nervousness.

"With the recent downdraft in rates, there are certainly some homeowners who will jump right in to take advantage of these compelling rates," said Hamrick. "We've recently seen the lowest mortgage rates in three years, and then the surprising Brexit vote brought many investors into the bond market, taking yields or rates down."

New Berlin, Wicsonsin-based Landmark Credit Union was among lenders Monday offering a 3.50 percent (or 3.537 percent annual percentage rate) with no points on a 30-year fixed rate mortgage. Points are fees paid by some borrowers to get a lower rate.

"Our refinance business has been strong all year, and it's accounted for about 45 percent of our mortgage business," said Jay Magulski, Landmark's chief executive. "And so, might this likely now lead to even further strengthening of our refinance business? It certainly may."

Economist Brian Jacobsen said refinancing is being driven by "people getting cash out of their homes and improving their monthly cash flow situation." In a cash-out refinance, a borrower takes advantage of equity built up in the property to refinance a mortgage for more than the amount owed, taking the difference in cash.

"Property values have been going up while interest rates have been falling," said Jacobsen, who is chief portfolio strategist for Wells Fargo Funds Management in Menomonee Falls, Wisconsin. "Not only are people deciding to take the plunge at a lower rate, a growing percentage are doing cash-out refinancings."

Bankrate's Hamrick said while rates may head upward again by the end of the year, "lower for longer has become the status quo for interest rates."

"Of course, we'll have a better idea about this as a number of events are resolved, including whether the recent soft patch in hiring is something more sustained and serious and whether there's longer-lasting negative financial/economic reaction to the Brexit vote," he said.

next story

back to home page


To see more of Milwaukee Journal Sentinel or to subscribe to the newspaper, go to www.jsonline.com

Copyright (c) 2016, Milwaukee Journal Sentinel

Distributed by Tribune News Service.


This story was distributed by TNS - Tribune News Service
 
Refinance News
News about refinance programs, pricing and production.
H A R P 2.0 News
News stories about the H o m e Affordable Refinance Program including expanded program guidelines.





Copyright © 2016 MortgageDaily.com
MortgageDaily.com Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

pricing engine directory

wholesale lender directory

More Mortgage News Resources (MortgageDaily.com full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

free mortgage news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

refinance news

reverse mortgage news

sales blog

secondary marketing

servicing news

subprime news

wholesale lenders

wireless mortgage news