Mortgage interest rates are soaring. Is it still okay to refinance a home loan?

Mortgage rates above 7% are the highest in 20 years and loan applications are declining. So homeowners looking to refinance their loans will also be heading to the sidelines in droves.

But it may still make sense for homeowners to refinance, according to experts. why? Fees, even at current levels, can still be a decent deal compared to alternatives.

“People are still refinancing when they need cash, so they are withdrawing stocks even at much higher interest rates, which is[still]cheaper than other forms of credit,” said William Blair & The Company’s macro analyst Richard de Chazal said in a statement.

According to Freddie Mac, the current mortgage rate for a 30-year fixed mortgage is exceeded 7% last week. As interest rates rose, he saw his mortgage applications drop 1.7% in the week ending Oct. 21, because it was so low to begin with. According to the Mortgage Bankers Association.

Not good news for those in the mortgage refinancing business. However, many homeowners still need money, and refinancing may still be a good way to raise cash.

According to Black Knight, about 133,000 US homeowners can now save about $325 on their monthly payments by lowering the tax rate to 7.08%. This is the lowest population since 2000, when the analytics firm started tracking this metric. (This population of homeowners has had a mortgage since 2008 or earlier.)

Indeed, many homeowners now have lower-than-average mortgages, making refinancing less attractive. However, there are some situations where refinancing is useful.

The first is for people who are in need of money.

CapWealth Chief Investment Officer Tim Pagliara said: told Yahoo Finance in a phone interview.

For homeowners willing to accept higher mortgage rates, “it’s still cheaper to get a mortgage than an 8% car loan,” Pagliara added.

After two years of rising stratospheric home prices, some borrowers may be willing to accept higher mortgage rates if they use cash-out refinancing options. You cash difference.

“You can borrow up to 80% of the value of your home with a conventional conventional loan or an FHA loan in cash or refinance. Mortgage Bankers Inc’s producing branch manager Tina Pecoraro told Yahoo Finance.

Another potential borrower looking to refinance has a mortgage coming up soon.

“Homeowners with shorter mortgage terms are likely to refinance for longer terms to pay less, so they can probably free up some cash without losing their equity.” said Chazal. For example, he extends his traditional 30-year mortgage which only has 10 years remaining.

“Volume is down on the refinance side,” Pecoraro said. However, we are seeing people looking to renovate their homes refinance instead of paying off their card debt or taking home renovation loans with high interest credit. because it is expensive.”

But Pecoraro is optimistic that the refi business will revive. face of the industry further dismissed.

“It depends on where interest rates go,” he said. I’ve been doing this for about 18 years and the rates will drop again. ”

Dani Romero is a reporter at Yahoo Finance. follow her on her twitter @daniromerotv

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