Source: Yahoo! News —
Mortgage rates, over 7% or so, are at their highest levels in 20 years and loan applications are down. So, it should follow, that homeowners looking to refinance loans would also be headed to the sidelines in droves.
But according to experts, it might still make sense for homeowners to refinance. Why? Rates, even at current levels, can still be a decent deal compared to alternatives.
“People would still be refinancing if they need the cash, so they are withdrawing equity, even at much higher rates. This is (still) cheaper than other forms of credit,” Richard de Chazal, macro analyst at William Blair & Company, said in a statement.
According to Freddie Mac the current mortgage rate on a 30-year fixed mortgage surpassed 7% last week. With climbing rates, applications for mortgages fell 1.7% for the week ending October 21, but only because they were so low to begin with — down 86% from a year ago, according to Mortgage Bankers Association.
Not great news for those in the business of refinancing mortgage loans. But many homeowners still need the money and refinancing may still be a good way to raise cash.
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