Thursday, February 3, 2005

Rate Hike Leaves Refinancing Rates Low And Steady

The Federal Reserve on Wednesday raised interest rates for the sixth time since last June, as policy-makers continued their efforts to make sure a strengthening economy does not trigger unwanted inflation.

Short-term interest rates to 2.5 percent -- an increase of 25 basis points

Applications Rise
The Market Composite Index, an overall measure of mortgage applications, rose from 658.1 to 706.4 on a seasonally adjusted basis during the week ended Jan. 28, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey.

Wednesday's Fed move allowed Treasury yields to remain steady and mortgage rates followed their lead.Home refinancing gains full sway as homeowners prepare for home maintenance projects, remodeling, landscaping vacation season. Interest rates for home refinancing are at a significant low.

Borrowers are cautioned to think twice regarding using the equity in the home to payoff unsecured debt. If you truly cannot afford the it or their is significant risk you could be heading in the direction of foreclosure. That said consider another route. Invest 50% of the funds in something that will bring in a return of income. Opt for a less risky loan deal. Reduce the risk and save your home.