On April 2, our neighbors gave the go ahead for a refinance. Twenty-six days later they got the paperwork and signed immediately. Their interest rate was locked in at the rate as of April 2 – which was 4.25% for a 30 year fixed. Interest rates started to climb. As of June 11, 2009 a 30 year fixed rate mortgage is 5.79% up from 5.0% two weeks ago.
More than 9 weeks have passed. The re-finance has been extended. Everything is fine they say. Then why so slow?
Rising interest rates threaten to dim prospects for a housing recovery and choke off a refinance wave that was a major plank of the Obama administration’s economic stimulus efforts.
Besides locking a lower rate, our neighbors hope to pass along some money to younger relatives. So that family members could buy homes for the first time. Those dreams may sputter. Higher interest rates mean less affordable mortgages for everyone.
