CNC Mortgage Blog

I asked one of the bank representatives with whom we deal a lot as to their level of activity. Her response was that they were not very busy.

It is not totally clear as to why there is so little activity because rates are back down to almost historic lows.

There might be a few reasons I can think of:

1) Appraised values of properties are too low to refinance. That is partially true.

2) Many homeowners are already at good rates.

3) Homeowners are worried about the general economy. Not a good reason not to reduce mortgage payments.

RATE OVERVIEW

30 year fixed mortgages are close to 4.625%.

15 year mortgages are available at 4.25%, often with reduced closing costs.

3/1 ARMs are at 3.625%, 5/1 ARMs are at 3.75% and 7/1 ARMs are at 3.875%. These are not the horrible ARMs sold with subprime mortgages in the past. They are capped at 5% over the initial rate and based on LIBOR plus a margin for the bank. LIBOR today is at 1.24% and the margin is 2.25%. So if the 5/1 ARM were resetting today the rate for the next year would be 3.49%.