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Transcript
After two slow years, mortgage refinancing market taking off BY MARILYN BOWDEN With interest rates still low and pricing more stable, mortgage refinancing is picking up in Miami-Dade. After very little activity in 2009-10, the refinancing market is just taking off, said Rashmi Airan-Pace, a partner in the realestate law firm Airan2, AiranPace & Crosa. Appraisals were slow, she said, and there was uncertainty as to the real market values of the properties. B ut now banks , homeowners and buyers agree on the true values of these homes, so this is when people will be able to refinance. The interest rates are good, and its in the best interest of the lenders to allow them to go forward; it means getting a good loan on their books. Its a cyclical process, she said. In 2004-05 there was a big refinancing boom, and then 2005-06 were big purchase years. Ms. Airan-Pace emphasized that the people who are eligible are largely those who bought before the boom, whose loans are not under water. Nancy Stoner, an associate in t he l a w f ir m D an ie ls , Kashtan et al., said she is also seeing refinancing coming on strong. People who are financially able to refinance are doing so, she said, and coming to grips with the adjusted value of their property. Theyre also concerned that they are getting the best interest rate and that rates are going to start going up. This contrasts strongly with the pace of loan modifications, sought by those who dont have financial stability and who are not able to come up with the difference between what their house is worth and what they need, Ms. Stoner said. Photo by Maxine Usdan People who are financially able to refinance are doing so, and coming to grips with the adjusted value of their property, said Nancy Stoner. Theyre also concerned that they are getting the best interest rate. Lenders are not proceeding cant rate, she said, though able to short sales, and that is with modifications at a signifi- they are getting more amend- helping to fuel some of these Photo by Marlene Quaroni Even decreasing payments a few hundred dollars a month can make a difference, said Claudine Claus. transactions. A slight increase in rates did lead to a slowdown in refinancing activity over the December holidays, said Claudine Claus, president & CEO of Home Financing Center, but now its starting to pick up again. What Im hearing is that people who were unemployed are now employed and qualifying again. She said borrowers who have been thinking about refinancing should do it now, because theres only a small window when rates are low that it makes sense to do so. It helps if they have a loan thats with Fannie Mae, Ms. Claus said. Then the loan amount can go up to 125% and they can still refinance. But that will expire in July. While most of the time mortgagees dont know where their loan originates, she said, they can call us and we can look it up for them. The rise in refinancing has positive implications for the economy, Ms. Claus said, as well as for the housing market. If borrowers are decreasing their payments even by a few hundred dollars a month, she said, that can make a difference and most are saving more than that. They will have more money to spend in the market, which will help the economy in general, and it will make their existing homes more affordable. In general, Ms. Airan-Pace said, there is more stability coming to the market in terms of market value. The economy is starting to see some stability, and people are starting to buy. The rise in refinancing applications signals to the lenders and to the market at large that there is stability at some level, said Ms. Stoner, and that provides ballast for the market in general. It makes everybody else understand that its safe to buy.