At present the mortgage rate trend in America is not all that encouraging and is not going the way the professionals predicted. The mortgage rate is at the lowest since the year 1950 and not many are buying the house now.



The demand is low or are all very poor

When the average mortgage rate is 5.9 %, if the new mortgage rate is 4.75 % many people will go for refinancing of their home in order to get their monthly instalment reduced. The people will do so in the normal times but at present the situation is not normal. The housing market has taken a big hit because many banks were broke financially which had brought down the value of the most property.

HARP program a complete flop

HARP is nothing but homeowners affordable refinance plan. This plan enables the homeowner to get refinance even if that homeowner mortgage is upside the down. Through this plan the administration planned to provide refinance for two million homes in stipulated eighteen months. Unfortunately the administration could only provide 3 lakh refinance loans only as many banks did not participate.

Jumbo loans are available more

Now the banks are tightening their purse and not releasing any conventional loans but are easing the requirement for the jumbo loans. Earlier it was 25 % down for the jumbo loans, but the same was relaxed to 20 % down now. Hence those who are wealthy can get loan for jumbo loan by paying fewer down payments than before. Hence for those who have great credit and good amount of cash at hand , this time is very good as they can take advantage of the super values in the housing market. The mortgage rate trend is upside down now and one can not expect the situation to get right soon. The mortgage trend rate is very unpredictable and is likely to remain so till the financial crisis gets over.