Thursday, January 19, 2012

Mortgage outlook is up!

Mortgage companies have more positive outlooks on 2012 sales, according to

Expectations for residential originations during the first six months of this year have been raised by more than $45 billion. By the second quarter, financing for home purchases is expected to leap by nearly a third and not look back.

For veterans, the news is good as well: VA loans are expected to be climbing from the first quarter's $72 billion to $78 billion in the second quarter,

How can you take advantage of this news? If you have equity in your home and a high current rate, you might want to think about refinancing, as it will become easier to get a new loan.

I recommend refinancing your loan if you can reduce your payment amount without extending the payment time. That is, if you have 20 years left in a 30 year mortgage, do not get another 30 year loan!  You might pay less per month, but over the length of the loan, you'll end up paying more.  Instead, get a 15-year loan.  With the lowest rates in decades, you should still be able to save money.

Keep in mind the payoff for the loan origination fees as well: If you pay $1500 to refinance and you save $100 per month, your break-even point is fifteen months.  If you move or refnance again before that time is up, you'll have spent more money, not less.

If you're part of a veteran household, check the VA home loan rates at From what I understand, their VA loans' rates are very competitive.  Of course, be sure to check out other loan sources as well, and be sure to ask about refinancing fees.

I hope that this good news about loan originations signals an improvement in the housing market.  We shall see!

(This post brought to you by  All opinions are 100% mine. Please see my disclosure policy for more information.)

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