My website has current rates updated daily. Scroll to the bottom of the page.
http://www.lenderhomepage.com/content/template62/blue/Inner.php?page=rates&acctid=100719
At 6.2% apr the payments are going to be higher for the house where as with slight decrease in the rate I could afford a better home with same or lower payments. How can the monthly payments be at a lower rate?
6.25 APR is the simple rate plus cost of the loan over the loan term. Simple rate is more like 5.875 with some lenders currently offering 5.75 at par. There has been some movement in rates the last few weeks up and down/ with avg. sway around .125 to .25 bps.
Yes, we are clearly still in one of the best rate environments the last 35 years yet an increase by more than .375 up or down this quarter is unlikely to happen. Contrary to popular belief, mortgage rates are based by mortgage-backed securities and not the fed or the 10yr bond (now, there are factors that are considered, such as un-employment and housing starts). While Fannie Mae, Freddie Mac as well a several Wall Street firm have all taken losses (some huge) the outlook is still positive.
You may consider an I/O if certain disciplines are met. I do not believe a person should ever use an I/O to qualify for a home they cannot afford. If however, you qualify for the full PITI payment, than an I/O may not be a bad idea. You would use the I/O for lean times and make the full PITI payment when able. This does take discipline on you part.
Here is an example based on a purchase price of 350k with note rate of 6.25 I/O @100%. 350k loan @ 6.25 = 2155.01 PI (1822.92 is Interest / 332.09 is principle) after 5 yrs you will have a balance remaining of 326,680.36 or 23,320 in principle reduction.
I/O scenario: 350k loan at 6.25 I/O = 1822.92 @ 100%. After 5 years, your balance remaining is 350k or 19,925 less payments. Here is where discipline come into play, what if you used that 19,925 to pay off credit cards, high interest debts, or used 332.09 monthly to fund an investment account? With an I/O properly managed, you could even pay 200 toward principle reduction and 100 extra towards your other high cost debt. Just some ideas..some will agree some won’t. Talk to a professional and come up with a good game plan.
FYI: The average 30-year fixed mortgage rate fell from 6.34% to 6.28% over the seven-day period ended Feb. 8, according to Freddie Mac’s Primary Mortgage Market Survey.
Freddie Mac Primary Mortgage Market Survey
(Seven Days Ending Feb. 8, 2007)
Source: Freddie Mac
The average 15-year fixed mortgage rate fell from 6.06% to 6.02%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages declined from 6.04% to 5.99%, and the average rate for one-year Treasury-indexed ARMs decreased from 5.54% to 5.49%, Freddie Mac reported. Fees and points averaged 0.3 of a point for fixed-rate mortgages, 0.4 of a point for hybrid ARMs, and 0.7 of a point for one-year ARMs. "News of moderate employment gains in January led to a halt in the recent upward trend of interest rate movements," said Frank Nothaft, Freddie Mac’s chief economist. "The 111,000 jobs added last month were fewer than had been anticipated, while the unemployment rate edged up unexpectedly." A year ago, the average 30-year and 15-year fixed rates were 6.24% and 5.83%, respectively, and the average hybrid and one-year ARM rates were 5.89% and 5.34%, respectively, Freddie Mac said. Freddie Mac can be found online at http://www.freddiemac.com.
even though this is the adjustable rate CONTRACT that borrowers signed into.
Talk about government takeover…
I think borrowers and lenders should sit down and rehash their contracts on their own as it does not serve the lender’s interest to foreclose properties.
I disagree with it, but I think there should be some sort of limit on how much they can raise them for some time.
I think if they freeze the interest rates for 5 years that it may create an even bigger problem when they are able to adjust them… and isn’t interesting that she said for 5 years, that would make her 4 year term look great and on the 5th year if she weren’t to be re-elected then the next person would be left with the mess it could create and they would get the blame as well….
it is impossible to answer this question only speculate
why worry just buy the house if you keep it long enough you will ride any fluctuation in interest rates that worry you
Do you think housing sales will increase soon and do you know that the housing situation is near Las Vegas NV?
Mortgage rates are still quite low and there is some concern in the markets that bonds have been oversold which could lead to a drop off that might see rates increase in the future. Anyone who tells you that they know for certain what is going to happen with mortgage interest rates is blowing smoke. It is possible to predict trends but not certainties.
The Las Vegas market has been a strong market. I wouldn’t anticipate any drop off in prices in the predictable future.
i am really interested in lowerin my rate and is my house has accrued equity i will like to take some out….. Please Advice
there’s no time like the present, I’m sure the rates will not see 4% and that light of day, so jump on it and do some shopping.
if your equity is not to good at this point, you could use it up in points and fees just getting the loan, so beware of the costs/coats/costs!!!!!!!!
get a fixed and if you have a less than 6% now that is fixed, don’t blow that, just do a heloc and use only what you need and don’t squander the loot.
It can cost you more sometimes to get money then its worth.
so think about and consider your position at this time .
what is you score and what are the cost to get $$$$$
Any professional opinions? Will they climb further as they have over the past month or will the trend reverse?
Traditionally, in the past as housing markets decrease, interest rates will decrease as well to spur more buyers to buy.
However, so much is up in the air. Interest rates are already at very low averages, and inflation will start climbing as the credit crisis hurts the banking industry. One card the Fed can play to lower inflation is to increase interest rates.
If it were to bet on things – I would say we will see another year or two of decreasing rates, before the Fed starts trying to correct for the escalating inflation by increasing interest rates which will eventually lead to increase in mortgage rates.
I am trying to lock in a good interest rate on my new home.
Bankrate.com
Anything above 720 is considered excellent and will qualify you for the best rates. I have been in the mortgage business for 10 years. Rates are going up very fast though so I would lock as soon as possible.
Why are mortgage rates up if the Fed is cutting?
This will be very helpful to send to customers that want to know why rates would be going up if the Fed is cutting short term rates.
http://www.msnbc.msn.com/id/23412069/from/ET/
We are trying to debate if we go with a new build or a spec. home! A spec home is ready now and we can lock into an interest rate now. A new build will take 6 to 8 months, Where will it be then?
Interest rates depend on the amount of points paid, length of mortgage and your credit score. You need to talk with someone about your specifics.