Mortgage Refinance Boom Still a 'Once-in-a-Lifetime Opportunity'

There isn't much written about the issue in the national media, where the focus is on gun violence and fiscal cliffs, but the U.S. is in the midst of a mortgage refinancing boom that should continue well into 2013.

According to the Washington, D.C.-based Mortgage Bankers Association's weekly applications survey, refinancings were up 8 percent from the first week in December and are at their highest levels since January 2009.

Overall mortgage loan application volume was up 6.2 percent, according to the MBA index, signaling a white-hot mortgage market thanks to a slightly improving economy and continued low mortgage rates.

The BankingMyWay.com Weekly Mortgage Rate tracker shows 30-year fixed mortgage rates at 3.44 percent and 15-year fixed mortgages at a rock-bottom 2.86 percent.

Adjustable-rate mortgages are at bargain basement levels. The BMW tracker has one-year ARMs at 3.20 percent and five-year ARM's at 2.53 percent.

"Continued uncertainty due to the lack of resolution regarding the fiscal cliff led interest rates lower last week, with mortgage rates reaching a new low in our survey," offers Mike Fratantoni, the MBA's vice president of research and economics.

"Refinance activity increased, with the refinance index hitting its highest level in two months, and the refinance share reaching its highest level since January 2009," he adds. "Applications for purchase increased for a fifth consecutive week, and are running almost 10 percent above their level at this time last year."

Just how excited are mortgage consumers over low rates?

The MBA says that 84 percent of all total mortgage applications are refinancings right now, with fixed-rate mortgages encompassing 97 percent of all refinancings. That's a good sign for the housing market and for the economy, as fewer people are opting for riskier adjustable-rate mortgages, which were a key negative driver in the housing market collapse of 2008 and 2009.

Mortgage rates are so low that one national mortgage lender calls the current housing market a "once-in-a-lifetime opportunity."

Plymouth Meeting, Pa.-based New Penn Financial says that you can easily snag a new home right now or refinance an existing one, even if your finances are problematic.

"It's now possible to purchase a first home or to refinance at record low mortgage rates -- even if your home has severely depreciated in value," says Bob Johnson, director of capital markets with New Penn.

Some of the interest comes from a tweak to a government-sponsored home loan program.

"The modifications made to President Obama's Home Affordable Refinance Program are another boon to many borrowers, especially those underwater on their mortgages," Johnson says. He explains that more consumers can grab a HARP loan because there is no longer a loan-to-value cap. "You can owe more than 125% of your home's worth and still be eligible," he adds.

The company reports it's seeing 30-year mortgage rates as low as 3.3 percent, and 15-year rates as low as 2.66 percent these days.

Those are ridiculously low rates, and you can make a smart financial move by locking in those low rates for the life of your home mortgage. You'll need good credit, and you'll need to shop around.

But good mortgages are low-hanging fruit going into 2013. And by all indications, it looks like things are going to stay that way.

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