According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications was 38 percent higher last week than during the same week one year ago. This was largely driven by refinance demand.
Michael Fratantoni, MBA’s chief economist, said the United Kingdom’s decision to leave the European Union was behind some of the irregularity.
“Whether the impact of Brexit will be contained to the initial shock of the ‘Vote Leave’ victory or will have a longer-term impact on markets is unclear …” Fratantoni said. “MBA’s best guess at this point is that the impact on the mortgage market will be to keep mortgage rates lower for longer, leading to another pickup in refinance activity in the near future.”
This is good news! The lower the interest rate, the lower the payment. The lower the payment, the more goes towards the principle balance. We all know: the more you pay towards the principle, the faster you pay your loan off. More here.