FHA Mortgage Source
The average interest rate for 30-year fixed-rate mortgages climbed to 5.25 percent during the week ending May 29, up from 4.81 percent the week prior, according to the Mortgage Bankers Association. It was the largest gain since October.
That pushed down the Washington, D.C., trade group's measure of mortgage loan application volume by 16.2 percent, on an adjusted basis that took into account the Memorial Day holiday. Refinance activity, which is particularly sensitive to rate increases, led the way, dropping 24.1 percent.
Encouraging refinancing and home buying were critical planks of the Obama administration's fiscal stimulus efforts, as such activity can help homeowners avoid foreclosure, put additional money into the pockets of consumers and absorb the inventory that's dragged down home prices.
Another source stated that bond vigilantes were the cause to the immediate rise of the mortgage rates. A large portion of homeowners were counting on rates to stay under the 5 percent range due to most of them are in the 6 percent range. There is still another viable option for homeowners that need are not planning to stay in their homes or need a short term break in monthly debt. Visit www.fhastreamline911.com they have a FHA 5/1 arm or 3/1 arm program with rates under 4 percent. Again a arm is a mortgage product that is fixed for a short period of time and will adjust up or down after the fixed period. A fha refinance professional at www.fhastreamline911.com may be able to provide better information.
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