According to HSH Associates, a firm that keeps track of mortgage data, the average interest rate on a 30-year mortgage was about 4.05 percent at the end of December 2011. This is considered to be a 60 year low. Rates for jumbo mortgages and private loans over $400,000 have also seen decreases averaging fewer than 5 percent.
If a homeowner refinanced their home in February with a $400,000 30-year mortgage, their interest rate would be around 5 percent. Lower interest rates help improve monthly payments and many homeowners could actually save close to $250 a month or almost $3,000 a year.
Those who are interest in refinancing may find that the demand for it is down since many borrowers took advantage of reduced rates. The Mortgage Bankers Association claims refinancing applications are down by 17 percent. Since the demand is down, it has prompted more lenders to give incentives to increase refinancing.
Loan modification is often considered if a homeowner felt they couldn’t qualify for refinancing but with lower rates and even regional and community banks looking to assist homeowners, it may be worth looking into. Loan modification is also an option for those who don’t meet qualifications to refinance. Questions and concerns should be reviewed with your lender.