Mid-October rates for a 30-year fixed-rate mortgage averaged 4.92%. This is 6.46% less than the rate a year ago.

According to Freddie Mac chief economist Frank Nothaft, rates under 5% are enticing some homeowners to take advantage of low rates to refinance their current balances. Northaft says that three out of five mortgage applications in the past several weeks were for refinancing.

“For people with good credit who have got some equity in their home, this is a good time to refinance to get a better rate,” says Brian Short, executive director of the Tennessee Association of Mortgage Professionals.

Not everyone is able to take advantage of the low mortgage rates, however. In many areas of the country, the rate is there, but the value is not. Low home values and tight lending conditions are market deterrents to refinancing. Also a factor, damaged credit scores due to unemployment or reduced work hours also prevent some homeowners from snapping up a better deal. Often, the best rates are available only to those with solid credit and a 20 percent down payment.


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