Refinancing rates on the rise

8/22/2011

Now may be the best time to refinance business loans. Application numbers from the Mortgage Bankers Association show an increase in refinancing for the first two weeks of August, perhaps due to the U.S. Federal Reserve announcing a long-term continuation of the current low interest rates.

"Unprecedented volatility in the stock market last week amid additional signs that the economy has slowed led to further drops in mortgage rates," said MBA Vice President of Research and Economics Mike Fratantoni, "with the 15-year rate reaching a new low for the MBA survey."

While an unsteady stock market may be bad news for many industries hoping for a rebounding economy, the increase in refinancing rates may indicate a softening of regulations by lenders. Borrowers also seem to be taking advantage of lower interest rates, and the next wave of banking activity may be an increase in loan originations if the market is looking up.

Refinancing accounted for a 78.8 percent share of mortgage activity in the second week of the month, up slightly from the previous week's 75.6 percent. This is the highest refinance ratio since November of last year.