Mortgage rates should climb in 2011, making now a perfect time to get a new home mortgage or refinance an existing loan.
Mortgage rates fell again in December 2010, as Freddie Mac said that the average rate on a 30 year fixed mortgage fell to 4.83 percent in late December, with 40 year mortgage rates seeing a similar decline. While the 30 year mortgage rate was higher than the previous yearly low of 4.17 percent reached in November, it marked a drop after five consecutive weeks of slight gains.
So what can homeowners expect in 2011? If you are a current homeowner, is this the right time to apply for a 2nd mortgage? Here's a brief look at what some experts predict will happen with home mortgage rates in the coming year:
Rising Rates: The Mortgage Bankers Association predicts that rates will slowly rise through 2011, remaining at around five percent for much of the year before reaching six percent in 2012. This means that now is a great time to lock in low fixed rates if you prequalify for a home loan.
Fewer Mortgage Refinancing Applications: Homeowners looking to refinance their home loans made up about 80 percent of all mortgage applications in 2011. The MBA predicts that this trend will end in 2011, with refinancing making up less than 40 percent of all applications and just 26 percent by 2012. The predicted increase in mortgage rates will be a major factor in this change. In addition, the fact that most people who qualify for refinancing will have already applied in 2010 will reduce the pool of potential applicants.
More All-Cash Purchases: More people are avoiding mortgages entirely and paying for their homes directly in cash. National Association of Realtors chief economist Lawrence Yun has said that 25 percent of all home purchases in the last four months of 2010 were all-cash, and that number should grow in 2011. The reason is simple: people are confused by the mortgage market and deciding to only purchase real estate that they can buy outright rather than having to take on additional debt.
Mortgage rates fell again in December 2010, as Freddie Mac said that the average rate on a 30 year fixed mortgage fell to 4.83 percent in late December, with 40 year mortgage rates seeing a similar decline. While the 30 year mortgage rate was higher than the previous yearly low of 4.17 percent reached in November, it marked a drop after five consecutive weeks of slight gains.
So what can homeowners expect in 2011? If you are a current homeowner, is this the right time to apply for a 2nd mortgage? Here's a brief look at what some experts predict will happen with home mortgage rates in the coming year:
Rising Rates: The Mortgage Bankers Association predicts that rates will slowly rise through 2011, remaining at around five percent for much of the year before reaching six percent in 2012. This means that now is a great time to lock in low fixed rates if you prequalify for a home loan.
Fewer Mortgage Refinancing Applications: Homeowners looking to refinance their home loans made up about 80 percent of all mortgage applications in 2011. The MBA predicts that this trend will end in 2011, with refinancing making up less than 40 percent of all applications and just 26 percent by 2012. The predicted increase in mortgage rates will be a major factor in this change. In addition, the fact that most people who qualify for refinancing will have already applied in 2010 will reduce the pool of potential applicants.
More All-Cash Purchases: More people are avoiding mortgages entirely and paying for their homes directly in cash. National Association of Realtors chief economist Lawrence Yun has said that 25 percent of all home purchases in the last four months of 2010 were all-cash, and that number should grow in 2011. The reason is simple: people are confused by the mortgage market and deciding to only purchase real estate that they can buy outright rather than having to take on additional debt.
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