Mortage rates at historical lows

The past few months have been lonely ones for mortgage lenders, but business is picking up. The phones are ringing, and banks don’t have to give away doughnuts to attract customers. They’ve got something much more enticing to offer: rock-bottom mortgage rates.

Last week, the average rate for a fixed-rate 30-year mortgage was 5.68%, down sharply from 6.34% a year ago, according to Freddie Mac (FRE). The drop in rates has prompted a surge of refinancing as homeowners look to get out of adjustable-rate mortgages or lower the rate on their fixed-rate mortgages. Applications for mortgage refinancing rose 22% for the week ended Jan. 25 from the week earlier, the Mortgage Bankers Association says.

Should you jump on the refi bandwagon? Unless you’re already paying a low fixed rate, it’s certainly worth considering, especially if you plan to stay in your home at least several more years.

Some borrowers may be tempted to hold out in hopes that rates will fall even more. But that’s risky, says Bob Walters, chief economist for Quicken Loans. Long-term mortgage rates are near historic lows, he notes, which means they’re more likely to rise than fall.

Article from USAToday.com - Read the whole article here.