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Archive for the ‘Mortgage Rates’ Category

Mortgage rates came down a little this week. We are still not back down to the levels we saw two weeks ago. 30 year rates fell from 5.25 to 5.16. This is a little higher than the 5.10 we saw two weeks ago and .2 points higher than the 4.96 we saw 4 weeks ago. But to put this all in perspective if we neglect the last month 5.16 is still one of the lowest rates we have seen in over 40 years.

One point of confusion is that when looking at average rates people relate it to a rate a friend or colleague got a few weeks ago. For instance if you had a friend that got a rate of 4.3 last week and see rates are at 5.16 you might think you really missed the boat. But 4.3 is lower than anything that has been officially published. Often these rates are down to paying more points to drive down the interest rate or they might be due to a special deal for instance a University offering professors a special rate. All this is to say if you have a friend that got a rate below 4.5 a few weeks ago don’t fret you should be able to a similar rate today that is only slightly higher. Below are rates for the last two weeks.

February 12, 2009
30-yr 5.16
15-yr 4.81
5-yr ARM 5.23
1-yr ARM 4.94

February 05, 2009
30-yr 5.25
15-yr 4.92
5-yr ARM 5.26
1-yr ARM 4.92

Besides the drop in the 30 year rate we also saw a similar drop with the 15 year fixed rate. Both the 5 year arm and the 1 arm stayed mostly steady. Looking at rates is interesting but we like to translate it into mortgage payments. We took rates from February 12th and translated them into a mortgage payment for a 200k loan. We also did the same thing with mortgage rates from February 5th and January 15th.

February 12
30-yr $1093.28
15-yr $1561.86
5-yr ARM $1101.93
1-yr ARM $1066.32

February 05
30-yr $1104.4
15-yr $1573.26
5-yr ARM $1105.64
1-yr ARM $1063.88

January 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

Looking at the 30 year rate we notice that while today’s payment would be higher than what one would have paid based on January 15th rates its not that much higher. If we look back a few months ago to October 30th when rates were at 6.46 the potential payment on a 200k mortgage would be $1258.87. All this is to say that rates have come up recently but all in all they are still low to what we have seen over the last several years.

Mortgage rates are the interest that is paid on the money that borrowers are lent. Borrowers have to pay interest to lenders for the service of lending money. Mortgage rates in California are affected by many factors, such as the credit score of the borrowers, down payment made, amount of the loan applied for, and the policies of the lender. The mortgage rates are mostly front-loaded, which means that the initial payments are used towards paying interest on the loan, not the principal.

If borrowers are getting financing for a new home, they can approach mortgage lenders as well as brokers to apply for the loan. It is advisable to get multiple quotes from different lenders before completing and submitting a mortgage application for approval. Brokers automatically provide multiple quotes, as they represent many lenders. By receiving several quotes, borrowers can compare various loan options and select the one with the lowest mortgage rate.

Borrowers in California have the option of locking in or floating the interest rates while applying for a mortgage. Locking in the rates means that there is an assurance the mortgage will be at that particular rate. If the borrowers choose the floating option, then they can watch the rates and lock it at the desired value.

To reduce the interest rates on a mortgage, a borrower can pay an amount that is generally equal to 1 percent of the loan amount, which is known as point. For instance, to get a lower interest rate on a $100,000 mortgage, a borrower may have to pay up to three points, which means three thousand dollars.

To compare the rates available for mortgages, borrowers can approach many mortgage brokers in California. These brokers have the expertise and experience to help their customers find the best deal. They have access to many mortgage plans of various companies, and can therefore help in comparison of rates and features.

Conversations between new home owners usually include comparisons of their low mortgage rates, and discussions of where they found them. Much of a good mortgage broker’s business is referral business from satisfied customers who pass their information on to their friends and acquaintances.

Another side of the conversation is when individuals are fooled into believing the low mortgage rates being offered to them are in fact the lowest or that the mortgage they chose was the best option for their situation.

Choosing a mortgage broker to guide you through the process of choosing a lending institution can be an excellent option if you choose carefully. Unfortunately, many mortgage brokerages are more interested in making sales than they are in providing excellent service, and will not advertise the lowest rates.

Fortunately most people are smart enough to not do business with these companies. So when you find a good mortgage broker with competitive rates you will not only be certain that their low mortgage rates are legitimate offers, but that the mortgage you choose is also a good fit for your needs.

Low mortgage rates aren’t the only thing to consider when choosing a mortgage. It’s important to also determine whether the mortgage payments will be feasible not only now but in the future as well.

Working with this reputable and experienced brokerage will allow you to make the best choices, while saving you from common mistakes.

Low mortgage rates aside, it’s important to have help deciding between a fixed rate mortgage, and a variable rate mortgage. Both have their advantages and offer very different benefits. A good mortgage broker will help you to understand why low mortgage rates aren’t the only thing to consider when choosing your home loan. With their many years of experience and satisfied customers, you will be certain to get the best offers and the best customer support in the business.

Visit your good mortgage broker today to see what they can offer, as well as to learn more about what makes a mortgage a great fit for you and your family. You can be assured of an honest representation of interest rates and a broker that will listen to what you are looking for in a mortgage and offer you suggestions and options to suit your needs. Let them show you why choosing a mortgage with low interest rates is just the beginning, and what it means to work with a competent mortgage broker.

Everyone’s talking about record low mortgage rates. But how long can we expect the trend to continue?

Conventional wisdom says: when the economy is struggling, rates drop. Traditionally, a strong indicator of mortgage rates is the yield on 10-year Treasury bonds. When investors are skeptical about the economy, they flock to treasury bonds. As a result, 10-year Treasury yields fall, and so do mortgage rates. This is exactly the scenario we’ve been seeing in recent weeks.

But of course there are many factors to consider, and rates are more complicated than this simple rule would suggest. And while it’s difficult to make predictions, naturally people will try! In fact, I recall earlier this year the word from experts was that we could expect rates jump at the end of March, when the fed officially stopped buying mortgage backed securities.

Well, thanks to the volatile market and struggling economy, rates actually dropped and have been dropping since April.

Let’s see what experts are saying now throughout the web:

* According to HSH Associates, the nation’s largest publisher of mortgage and consumer loan information, stated: “The economy is weak, confidence is waning and there doesn’t seem to be a viable solution to promoting recovery – except time. This suggests a slow-growth, low-rate period for the remainder of the summer. The flight-to-safety which has fostered low interest rates might wane somewhat, especially if stock markets can find some footing, but probably will not press rates upward by much during the forecast period (through September).”

* According to Real Estate ABC, a resource for home buying and selling information for consumer and real estate professionals, says “…consumer confidence is down again, by four points following a 10 point drop in June. With so little confidence in the economy, the markets may continue to flounder and it is possible rates could inch down further.”

* The Financial Forecast Center, a privately owned publisher of market forecasts, shows 30-year mortgage interest rates hovering around 4.4% – 4.5% through the end of the year.

Seems that experts are agreeing we may be in for low rates for a while. But, they’ve been wrong before! And it’s important to note that the current lending environment dictates that the lowest rates are available only to highly qualified clients (i.e. those with high credit scores).

Another factor to consider when looking at rates: some servicers are experiencing such a high volume of leads, that they actually adjust the prices up to cope with the demand. In other words, they slow their production by increasing the cost for consumers. This means you’ll actually save money by going with a lender that knows how to get the job done!

And while the US consumer may become accustomed to seeing rates in the 4 and 5 percent ranges, history shows that the average rate was actually 7.5%, so no matter how you look at it, now is a great time to lock-in and buy a home or refinance.

If you’ve been looking at getting into your first house then you know the amount of research and work that needs to be done before you can claim the home and begin your life as a new home owner. This of course extends to many different factors such as the base price of the house itself, your income, your credit rating and of course the amount that you can handle when it comes to monthly payments as well as interest rates. Something else to consider is that you want to make sure that you get the best possible rates you can while simultaneously making the mortgage lender comfortable so that you are both happy.

You want to make sure that you can actually afford the payments and interest rate and the lender wants to make sure that you can actually pay on time thereby minimizing his risk as well. You may have also heard about FHA mortgage rates and wonder if they can help you but also if they’re any good for the lender as well. You may be surprised to learn that this is one of those rare instances where it can do both.

Consider for a moment what the FHA actually is: it is an organization that focuses on insuring the lender so that the risk that they take when they provided mortgage is minimized. In these economic times this is very important as more and more lenders are tightening up restrictions on who they lend to and are also introducing new more stringent requirements that you need to meet especially when you want to buy a house.

Something else to consider is that although already the FHA is helping you out by making it easier to obtain a mortgage you want, it also has some of the lowest interest rates you will find because of the work of the organization does. So this helps you in another way by ensuring that the rates you get are among the best that you’ll be able to find. This will of course eliminate a lot of research for you and will make your payments simpler.

Mortgage interest rates in U.S. have been swinging wildly in the past few months. There are clearly very important factors causing the swings. One obvious factor is federal reserve action. Another is consumer spending. Other factors include GDP or gross domestic product, consumer confidence and unemployment.

In the coming months, economists and industry leaders are expecting not-so-good mortgage rates predictions. They expect that mortgage rates continue to be volatile and quite unpredictable in the coming months. In this age of adjustable rate mortgages (ARM), this volatility is not something that the homeowner should be happy about.

The obvious key in mortgage rates predictions is to be fully aware of the most recent numbers regarding some of the more important factors affecting mortgage interests. These include federal and state actions, consumer spending and confidence, the gross domestic product and unemployment.

The numbers here will not lie and should guide the homeowner-borrower on what to mortgage rates to expect in the coming month or so. As in any other activity, planning is clearly an essential part in mortgage management. In planning, mortgage rates predictions should be considered.

Of course, to the ordinary homeowner may not be able to do the predictions themselves. It is likely also that they would not know of anyone who can do the analysis for them. They will have to go to learned hands or search for reliable sites on the internet.

What is important is that, homeowners should exert effort to get as much information as possible and to be aware of the more reliable mortgage rates predictions available on the net.