Dropping Mortgage Rates Spur Refinance Fever

Mortgage interest rates have been rising steadily for more than two years, and are expected to continue climbing higher in 2007. Because of that prediction, many homeowners are eager to refinance out of high-interest adjustable-rate mortgages, interest-only loans, and other mortgages with increasingly expensive monthly payments.

Now may be the best time to do a mortgage refinance out of home equity loans and mortgages that have high rates of interest, because those rates recently hit their lowest mark in more than a year. Mortgage rates have fallen for 10 of the past 13 weeks. Concerned consumers weren't waiting for them to resume their upward spike. Instead, they're flocking to lenders to refinance. Financial newspapers report that the volume of mortgage applications across the nation has risen sharply in the past few weeks. That's because homeowners are taking advantage of temporarily low rates to refinance out of less predictable and more expensive loans.

Seize the day!

Rates are currently hovering around 6.11 percent, the lowest since January 2006, according to Freddie Mac. This contrasts to this year's average rate of 6.44 percent. Just six months ago, the average rate on a 30-year fixed loan was 6.67 percent. And while it's true that nobody has an economic crystal ball, some experts have warned that we may see the return of double-digit rates before too long. If that happens, today's sub-7 percent mortgage rates will look like bargain basement discounts.

Whether you want to refinance a second mortgage, take out a new mortgage to purchase a home, or to borrow some quick cash for holiday expenses, refinance mortgage fever has people going to meet with their lenders. If you act in a timely manner, you might be able to give yourself a valuable holiday gift in the form of a refinance or home equity loan with substantial interest rate savings that will continue to deliver over the coming months and years.