Mortgage Rates Fall But Who Can Refinance?
Mortgage rates fell again this week prompting the usual segments on the news shows that the prudent investor should refinance now for savings. And while this is, on the surface, sound advice, what it overlooks is whether there is still enough equity in the home to make a refinance approval likely.
In some regions of the country, home values have dropped by more than 20%. This drop may cause some folks to go upside down in their mortgage owing as much or more than the home is worth. Even with a small positive equity, many home owners could get turned down for refinancing unless they can afford to pay a sizable payment to increase their equity position in the home.
So an opportunity for a few folks but nothing that will help the rank and file who are, in some cases, hanging by a thread financially and braceing for more layoffs in the post holiday economy.