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Mortgage Refinance in 2010

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While the United States has suffered through difficult economic times in 2008 and 2009, many experts are predicting that the economic outlook for 2010 is brighter. According to the finance experts at Kiplinger, 2010 will be a transitional year into a more stable economy, and we can expect modest growth in both employment openings and in consumer spending. Retail sales and exports are also expected to rise slightly, and housing starts should be up by about 25% from 2009 figures.

What does all of this portend for the mortgage refinance market? Although the rates for 30-year fixed rate mortgages are up slightly, they should remain fairly low for at least the first half of 2010. The Federal Government's program designed to keep mortgage rates at low levels will slowly phase out, which means that mortgage interest rates will start to climb as 2010 progresses. For those homeowners who have been on the fence as to when to commit to a mortgage refinance , it's a good idea to act within the next few months while interest rates are still relatively low.

It has become more difficult for borrowers to qualify for mortgages, since lenders have tightened their guidelines in response to the high rates of foreclosures across the country. The Federal Housing Administration is proposing even more stringent guidelines, which include larger down payment amounts, additional mortgage insurance, and higher credit scores. Borrowers who are considering a mortgage refinance transaction don't need to be concerned with down payments, but they do need to ensure that their credit record is in tip-top shape. Even one late payment on a credit card can adversely impact a credit score, so be certain that bills are paid in a timely manner.

The Home Buyer Tax Credit Act, which provides for substantial tax credits for first-time and repeat home buyers, will expire on April 30. Real estate experts expect a lull in mortgage applications after this date, since many home buyers will be applying for mortgages before the April 30 deadline. The slowdown in home buyer mortgages means that lenders may step up their marketing efforts aimed at the mortgage refinance market in the spring. This is good news for homeowners who are interested in refinancing, as there may be more options in loans and additional lenders entering the market.

The bottom line: if you are thinking about refinancing your current home mortgage , don't wait more than a few months to contact lenders and investigate your options.