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More Refinancing Borrowers Opting for Shorter Terms in 3Q
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You're Now Reading:
More Refinancing Borrowers Opting for Shorter Terms in 3Q
The Easy Way to Shop For a Mortgage Loan
Fill Out One Questionnare
Receive Multiple Offers. Save Money.
The Easy Way to Shop For a Mortgage Loan
Fill Out One Questionnare
Receive Multiple Offers. Save Money.
You're Now Reading:
More Refinancing Borrowers Opting for Shorter Terms in 3Q
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November 16, 2011 (Chris Moore)

Over ninety-five percent of borrowers who refinanced their home loans in the third quarter of 2011 picked a fixed rate loan according to Freddie Mac’s Quarterly Product Transition Report regardless of whether their previous loan was a fixed rate mortgage (FRM) or an adjustable rate mortgage (ARM).

Borrowers also continued to take advantage of the historically low interest rates and shortened the term of their loans at even higher rates in the third quarter than they did in the second quarter.

Forty percent of the borrowers who refinanced a 30 FRM chose a 15-year or a 20- year mortgage to replace their original loan, the highest share of borrowers to do so since the second quarter of 2003, up from thirty-seven percent in the second quarter.

Borrowers who refinanced a hybrid ARM chose a fixed rate loan sixty-three percent of the time during the quarter, up from fifty-four percent in the second quarter. Thirty-seven percent of borrowers who refinanced a hybrid ARM chose to refinance into the same type of product, down from forty-six percent in the previous quarter.

Frank Nothaft, vice president and chief economist of Freddie Mac, stated, “Fixed mortgage rates averaged 4.29 percent for 30-year loans and 3.47 percent for 15-year product during the third quarter in Freddie Mac’s Primary Mortgage Market Survey®, well below long-term averages. The Bureau of Economic Analysis has estimated the average coupon on single-family loans was about 5.3 percent during the third quarter of 2011. It’s no wonder we continue to see strong refinance activity into fixed-rate loans.”

Refinancing borrowers whose original loan was a 30-year FRM chose another 30-year FRM fifty-eight percent of the time, a 20-year FRM fifteen percent of the time and a 15-year FRM twenty-five percent of the time. That compares to sixty-two, thirteen, and twenty-three percent, respectively, in the second quarter.

Borrowers who originally had a 15-year FRM chose to stay with that product eighty-six percent of the time. Ten percent lengthened the term of their loans to 30 years and two percent lengthened their loans to 20 years. That compares to seventy-nine, fifteen, and two percent, respectively, in the previous quarter.

“Compared to a 30-year fixed-rate mortgage, the interest rate on 15-year fixed was about 0.8 percentage points lower during the third quarter. For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term. The initial interest rate on a 5/1 hybrid ARM was about 1.2 percentage points lower than on a 30-year fixed-rate loan. For borrowers who plan to remain in their current home for only a few years, the hybrid ARM allows for even a greater interest-rate savings,” Nothaft added.

Tags: Freddie Mac, refinancing borrowers, Transition Report, fixed rte mortgage, adjustable rate mortgage, hybrid ARM, interest rate savings

Source:
Freddie Mac

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Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
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November 16, 2011 (Chris Moore)

Over ninety-five percent of borrowers who refinanced their home loans in the third quarter of 2011 picked a fixed rate loan according to Freddie Mac’s Quarterly Product Transition Report regardless of whether their previous loan was a fixed rate mortgage (FRM) or an adjustable rate mortgage (ARM).

Borrowers also continued to take advantage of the historically low interest rates and shortened the term of their loans at even higher rates in the third quarter than they did in the second quarter.

Forty percent of the borrowers who refinanced a 30 FRM chose a 15-year or a 20- year mortgage to replace their original loan, the highest share of borrowers to do so since the second quarter of 2003, up from thirty-seven percent in the second quarter.

Borrowers who refinanced a hybrid ARM chose a fixed rate loan sixty-three percent of the time during the quarter, up from fifty-four percent in the second quarter. Thirty-seven percent of borrowers who refinanced a hybrid ARM chose to refinance into the same type of product, down from forty-six percent in the previous quarter.

Frank Nothaft, vice president and chief economist of Freddie Mac, stated, “Fixed mortgage rates averaged 4.29 percent for 30-year loans and 3.47 percent for 15-year product during the third quarter in Freddie Mac’s Primary Mortgage Market Survey®, well below long-term averages. The Bureau of Economic Analysis has estimated the average coupon on single-family loans was about 5.3 percent during the third quarter of 2011. It’s no wonder we continue to see strong refinance activity into fixed-rate loans.”

Refinancing borrowers whose original loan was a 30-year FRM chose another 30-year FRM fifty-eight percent of the time, a 20-year FRM fifteen percent of the time and a 15-year FRM twenty-five percent of the time. That compares to sixty-two, thirteen, and twenty-three percent, respectively, in the second quarter.

Borrowers who originally had a 15-year FRM chose to stay with that product eighty-six percent of the time. Ten percent lengthened the term of their loans to 30 years and two percent lengthened their loans to 20 years. That compares to seventy-nine, fifteen, and two percent, respectively, in the previous quarter.

“Compared to a 30-year fixed-rate mortgage, the interest rate on 15-year fixed was about 0.8 percentage points lower during the third quarter. For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term. The initial interest rate on a 5/1 hybrid ARM was about 1.2 percentage points lower than on a 30-year fixed-rate loan. For borrowers who plan to remain in their current home for only a few years, the hybrid ARM allows for even a greater interest-rate savings,” Nothaft added.

Tags: Freddie Mac, refinancing borrowers, Transition Report, fixed rte mortgage, adjustable rate mortgage, hybrid ARM, interest rate savings

Source:
Freddie Mac

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateUpdate and the offers you have received, you've found the right product and the best rate.
HOW
MORTGAGELOANRATEUPDATE
WORKS
Whether you're looking to refinance your current loan, purchasing a new home or looking for a home equity loan, we make it easy at MortgageLoanRateUpdate. Our questionnaire is simple and quick to use and your information is safely transmitted to us with SSL encryption. With just two minutes of your time, you could have multiple lenders competing for your business which could save you thousands.
ADVANTAGES OF USING
MORTGAGELOANRATEUPDATE
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.

November 16, 2011 (Chris Moore)

Over ninety-five percent of borrowers who refinanced their home loans in the third quarter of 2011 picked a fixed rate loan according to Freddie Mac’s Quarterly Product Transition Report regardless of whether their previous loan was a fixed rate mortgage (FRM) or an adjustable rate mortgage (ARM).

Borrowers also continued to take advantage of the historically low interest rates and shortened the term of their loans at even higher rates in the third quarter than they did in the second quarter.

Forty percent of the borrowers who refinanced a 30 FRM chose a 15-year or a 20- year mortgage to replace their original loan, the highest share of borrowers to do so since the second quarter of 2003, up from thirty-seven percent in the second quarter.

Borrowers who refinanced a hybrid ARM chose a fixed rate loan sixty-three percent of the time during the quarter, up from fifty-four percent in the second quarter. Thirty-seven percent of borrowers who refinanced a hybrid ARM chose to refinance into the same type of product, down from forty-six percent in the previous quarter.

Frank Nothaft, vice president and chief economist of Freddie Mac, stated, “Fixed mortgage rates averaged 4.29 percent for 30-year loans and 3.47 percent for 15-year product during the third quarter in Freddie Mac’s Primary Mortgage Market Survey®, well below long-term averages. The Bureau of Economic Analysis has estimated the average coupon on single-family loans was about 5.3 percent during the third quarter of 2011. It’s no wonder we continue to see strong refinance activity into fixed-rate loans.”

Refinancing borrowers whose original loan was a 30-year FRM chose another 30-year FRM fifty-eight percent of the time, a 20-year FRM fifteen percent of the time and a 15-year FRM twenty-five percent of the time. That compares to sixty-two, thirteen, and twenty-three percent, respectively, in the second quarter.

Borrowers who originally had a 15-year FRM chose to stay with that product eighty-six percent of the time. Ten percent lengthened the term of their loans to 30 years and two percent lengthened their loans to 20 years. That compares to seventy-nine, fifteen, and two percent, respectively, in the previous quarter.

“Compared to a 30-year fixed-rate mortgage, the interest rate on 15-year fixed was about 0.8 percentage points lower during the third quarter. For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term. The initial interest rate on a 5/1 hybrid ARM was about 1.2 percentage points lower than on a 30-year fixed-rate loan. For borrowers who plan to remain in their current home for only a few years, the hybrid ARM allows for even a greater interest-rate savings,” Nothaft added.

Tags: Freddie Mac, refinancing borrowers, Transition Report, fixed rte mortgage, adjustable rate mortgage, hybrid ARM, interest rate savings

Source:
Freddie Mac

Home Buying Tips
Home Selling Tips
About
Mortgages
HOW
MORTGAGELOANRATEUPDATE
WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at MortgageLoanRateUpdate and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
MORTGAGELOANRATEUPDATE
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.