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Low Rates Cause Surge in Refinance Loan Requests on Zillow(R) Mortgage Marketplace

Posted on: Tuesday, 27 October 2009, 07:01 CDT

SEATTLE, Oct. 27 /PRNewswire/ -- With mortgage rates reaching historic lows, Zillow Mortgage Marketplace reports a surge in refinance request activity within its free marketplace for custom mortgage quotes.

(Logo: http://www.newscom.com/cgi-bin/prnh/20060503/ZILLOWLOGO)

In the first half of October, as mortgage rates dropped below 5 percent, consumer interest in refinancing soared. The number of refinance requests for the first half of October versus the first half of September increased by 39 percent, making up more than half (51 percent) of all consumer loan requests. This is up from the first half of September when refinance requests made up only 41 percent of all requests.

Current mortgage rates are significantly lower than they were just a few months ago. Today's average 30-year rate of 4.9 percent is now 60 basis points lower (11 percent) than it was in June, when the 30-year fixed rate was at 5.5 percent, the highest level this year.

That means that on a $200,000 loan (assuming a home price or value of $250,000), the monthly principal and interest payment would now be $1,064.42 versus $1,141.61 for the same loan in June, saving a borrower $27,788.40 over the life of a 30-year loan.

"Current low interest rates are a key factor in consumers deciding to refinance their existing loans or to buy a new home. Shaving just a fraction of a percentage point off an interest rate can mean saving thousands of dollars over the life of the loan. When rates drop to record lows - as they are now according to data from Zillow Mortgage Marketplace - we see homeowners move quickly to take advantage," said Stan Humphries, Zillow chief economist. "But, as the Federal Reserve ramps down its purchase of mortgage-backed securities, I expect rates will rise somewhat by the end of the first quarter of 2010."

Launched in April 2008, Zillow Mortgage Marketplace is the first true comparison shopping site for a mortgage. Borrowers request loan quotes anonymously - they fill out a form with enough detail for an accurate quote, but no personally-identifiable information - and today, each borrower receives an average of 27 customized loan quotes from thousands of competing lenders. Borrowers request over 1,600 loans each day and receive more than 45,000 custom quotes from lenders nationwide. Sorting and filtering tools allow borrowers to compare loan programs by the True Cost of the loan over time, monthly payment, lender fees, and lender ratings and reviews across all loan quotes they receive. Zillow's lender rating and review system, which allows borrowers to publicly review lenders they've worked with, is an industry first. Borrowers have written close to 6,000 lender reviews. After comparing loan programs and lender ratings, the consumer can then decide when, and if, to contact the lender directly.

About Zillow Mortgage Marketplace

Zillow Mortgage Marketplace is a free, open, and transparent lending marketplace, where borrowers connect with lenders to find loans and get the best mortgage rates. Borrowers anonymously submit loan requests and receive an unlimited number of custom mortgage quotes with real rates directly from thousands of competing lenders. Zillow Mortgage Marketplace also provides mortgage calculators, mortgage advice, mortgage widgets, and lender directories.

Zillow.com and Zillow are registered trademarks of Zillow, Inc.

SOURCE Zillow.com

Source: PR Newswire

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