Lower Rates May Not Affect Refinancing Much

It's only natural to expect a huge wave of refinancing activity as mortgage rates for a 30-year fixed-home loan dip below 4% for home loans at loanDepot in October 2014. Reasons for the lack of activity include homeowners who won't qualify for a refinance and the fact that many have already taken advantage of lower rates within the past few years.

In addition the government wants to make it easier for Americans to purchase a home. The administration has been working with Fannie Mae and Freddie Mac to enable mortgages with just a 3% down payment and is easing penalties for banks who have loans default due to underwriting errors in an attempt to ease lending requirements.

Some homeowners with mortgages more than three years old have expressed that they aren't interested in refinancing. 7% have failed to qualify for a refinance attempt in the past due to lack of documentation or not meeting the income and credit score requirement. Others home owners already took advantage of lower refinancing rates as they have dipped numerous times in the past few years. This means that there are a large number of newer mortgages on the market meaning they would have to dip even lower in order to spur activity.

Experts contend that these factors will continue to mean less activity on the market; income generated by banks decreased by 2% by the major banks in the nation compared to 8% in 2012. With a higher risk of being sued or having to pay penalties if loans default banks are maintaining strict lending requirements.

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