08 May 2009

Mortgage Rate Drop Fuels Refinancing Boom

Home loan borrowers are cashing in on historically low mortgage interest rates as a refinancing boom gains momentum.

National mortgage refinance statistics jumped again for the last week in March -- up 3 percent from a week earlier and up 68.8 percent for the week ending March 27, on a year-over-year basis.

That news from the Mortgage Bankers Association represented a glimmer of hope for those waiting for a real estate market turnaround.

Borrowers making 20 percent down payments, for example, were able to qualify for 30-year fixed-rate mortgage rates of 4.61 percent on an average, down from 4.63 percent the previous week. Point -- an upfront fee mortgage companies charge for a specific interest rate -- also decreased to 1.03 from 1.13, including the origination fee.

That rate, the MBA said, is a new record low for the survey, which dates to 1990.

Most Road Home applicants choosing to stay in region

Most Road Home applicants in the New Orleans area continue to choose to stay in the region -- or at lease keep their property -- according to the latest figures from the recovery agency.

Of the 137,112 applicants in the New Orleans area as of March 26, 101,275 have chosen to keep their home, while 13,684 opted to sell and stay in Louisiana and 2,214 chose to sell and leave the state.

Orleans Parish had the most closings statewide with 44,343, representing 35.9 percent. Jefferson Parish was second with 24,028, and Calcasieu had the third most with 12,478.

Other New Orleans-area parishes report the following closing totals through late March:

  • St Bernard - 11,438
  • St Tammany - 10,711
  • Plaquemines - 2,928
  • St John - 1,181
  • St Charles - 943
  • St James - 357

The New Orleans area consists of Jefferson, Orleans, Plaquemines, St Bernard, St Charles, St James, St John and St Tammany parishes.

State hikes elevation grant limit to $100K

The state is increasing the maximum size of elevation grants funded by the Hazard Mitigation Grant Program from $30,000 each to $100,000.

The program is funded with $750 million in HMGP money from the Federal Emergency Management agency to provide gap funding for homeowners who are raising their homes after hurricanes Katrina and Rita and whose elevation costs exceed the amount of funding The Road Home program provides them.

"It will definitely help because a lot of people had thought about raising but haven't because they couldn't afford the difference between $30,000 and what it would cost them (to raise)," said Marge Garvey, New Orleans Metropolitan Association of Realtors president. "I think for people who are worried about buying a slab, it will help sell the property."

Letters have gone to 3,366 homeowners in the the program about their eligibility, notifying them of the change. Another 25,000 letters will be sent out by the middle of May.

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