Mortgage rates are declining to record lows, stimulating the demand for mortgage loan applications.
Mortgage application rates are increasing across the United States as mortgage loan rates are decreasing to record lows. The housing and mortgage boom is spurred on by Internet mortgage loan websites and new regulations that have made conditions better for borrowers.
According to www.reuters.com, the volume of mortgage applications is rising in the United States1. The news website reported that the industry’s index of mortgage applications increased by 32 percent over the four weeks prior to July 10th. This increase in loan applications has been attributed to the ongoing decrease in mortgage loan rates over the last few years. The graph pictured here, based on data compiled by www.freddiemac.com, displays the monthly average of commitment interest rates on 30-year fixed rate, 15-year fixed rate, and 1-year adjusted rate mortgages2. There is a clear downward trend resulting from the Federal Reserve Bank’s efforts to stimulate the economy by cutting rates. www.reuters.com reports that interest rates should remain low for months to come3. The reasoning behind this report is that with unemployment rising and with the stock market slow to recover, the Fed is likely to maintain its low rates.
New legislation is also contributing to the mortgage boom. The Wall Street Journal Reported on June 24th that on June 22nd the Fed “approved revisions to new regulations requiring lenders to submit price information on about 10% to 15% of all new mortgages”4. The new regulations referred to here are the amendments to the Home Mortgage Disclosure that the Fed approved in February5. These amendments require lenders to disclose to their potential customers the difference between the annual percentage rate of a mortgage loan and the rate of similar Treasury note of the same time period6.
The purpose of these new regulations is to reduce the amount of predatory practices mortgage lenders use and to better inform the mortgage customers before they make their mortgage decision. The law mandates that creditors must disclose the information the day that the lender sets the interest rate for the loan7.
Additionally, the Internet has developed into a vast marketplace for mortgage loans. Searching for the best rate has become increasingly simple for consumers seeking the lowest rates and the best terms. With so many options for lenders and for types of loans, the Internet is a useful tool that many customers have been switching to when considering home finance. The Internet has also allowed nontraditional lenders to gain a foothold in the market typically dominated by banks. According to the Wall Street Journal, in today’s mortgage industry, banks issue only 19% of the mortgages in the US8.
With low rates and better conditions for mortgage customers through legislation and Internet advertising, customers around the nation are applying for new mortgages or refinancing their old mortgages online at record paces.
*See the online credit card application for details about terms and conditions of offer. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the "Apply Here" button you can review the credit card terms and conditions on 's web site.