Tuesday, November 30, 2004

Home Equity Loans Gain Attention Over Refinancing

While the economic expansion continues to broaden, inflationary pressures are sending interest rates up.

The demand for mortgages declined during the week ending November 19, 2004, with the MBA index decreasing by 5.7% to 715. Both the refi and purchase components of the index fell. MOrtgage activity appears to have increased according the Mortgage Loan Search Network at http://www.mortgageloansearch.cc -

Consumer appear to be opting for home equity loans and cash out mortgage refinancing programs. Consumers seem to see this as a way to acquire funds for seasonal purchases and to cut down personal debt.

The greenback remains vulnerable. Clear path to further declines in the dollar.

Freddie Mac announced new maximum loan limits for next year. They said that they will purchase loans for single family homes up to $359,650, a sizable increase from this year's $333,700. Fannie Mae will likely follow suit in the next day or so. This would mean that borrowers can avoid jumbo rates for loans up to $359,650, which is approximately .375 of a percent higher than conforming rates.