Mortgage interest rates continue to still be very low, ranging from 4.25% to 4.75% for a 30 year fixed rate.
So why are interest rates so low? Some investors on Wall Street fear a double dip recession approaching. And these investors will seek more stability in buying bonds, such as the MBS's, Mortgage Backed Securities. By buying more MBS's, this can control the interest rates. Another reason is because earlier this week Treasury auction bids rose to 18% to record as investors surpass bond dealers.
Interest rates at one point this week hit a historical low, but since have increased slightly. But don't fret it, when I say that they have increased, I am talking about the cost of a 30 year fixed interest rate. The rates themselves are the same, but at times during the week, the actual cost might vary from .125 of a point to .375 points. On a $200,000 mortgage, this could mean the difference of $250 to $750. Let's say that this happens on an interest rate of 4.50% for the worse. You can have the choice in paying the extra cost that was mentioned or going to a rate of 4.625% which will usually offset those costs. What does this do to your mortgage payment? On a $200,000 loan, your payment would increase $14.92. That means that it could take you anywhere from 17 to 50 months to recoup that difference. This is where a good loan officer will ask you about your goals, to determine what might be the best course of action.
Mortgage Interest Rate Future Outlook
There is a hint of inflation that may be coming back and could hurt the markets for the worse. It could be a bumpy ride ahead. Overall, I would float cautiously in the next 3 to 5 days, but for the long term, I would think rates still hold steady. Meaning that they will continue to be low in the next 30 days, but could be a tad higher than what we are experiencing now. So if I had a settlement date in the next 30 days, I might lock now.
Word to the WISE :
If you see individuals and or mortgage companies offering mortgage interest rates at 4% or lower, there could be many points and or high lender fees involved. What is being sold off on Wall Street right now are the 4.0% coupons. Just be careful in what someone might tell you or promise you just to get you in the door.
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For more information on FHA loans, please go to this link. The FHA Expert
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!
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Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc
_____________________________________________________________________________________________________________________________
FOLLOW ME ON FACEBOOK
- FHA Loans - USDA Loans - VA Loans -
- Energy Efficient Mortgages -
- Conventional Loans - 203 k loans -
- FHA Home Loans - Mortgages -
Experience & Knowledge at its BEST !!!
Follow me on:
______________________________________________________________________________________________________________
For more information on FHA loans, please go to this link. The FHA Expert
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!
For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors
Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc
GO! Double Dip Inflation....no... wait, I didn't mean that. Jeez, Jeff, my head is spinning around. Not your fault, you are just the messenger. On the one hand, I like it...and on the other, I don't.
At least you help me explain it to people and thank you so much for that.
Good advice about floating (or not). I usually encourage buyers to lock if the payment works for them... In my experience, the rate is more likely to go up than down. I think that's called Murphy's Law, or something like that.
Thanks for the summary of interest rates. I will be repositing
SUZANNE... . while rates are very low, because of the government's spending the last 2 yrs in buying up the MBS's, that will hurt us in both the short term and long term. In reality, we need rates to move up in the 6's... it's not like people are flocking like crazy with the rates in the 4's. Credit is the main issue.. I have talked to 4 out of 5 people in the last 10 days or so that will have to wait any where from 3 to 10 months to buy until we get their credit fixed and scores up... any where from 40 to 80 points... and thanks for the compliment.
MARGARET.... . in the last 1 1/2 years, because the market has been so volatile, I usually say lock unless you want to risk this great rate. But in my opinion, going from 4.5% to 5% is not a huge risk. What one has to keep in mind is the cost to lock in for 60 to 75 days. Most lenders when advertising, advertise a 30 yr fixed rate for 30 days. To lock in for 60 days, it will cost around another 1/2 point or more. On a $200,000 mortgage, that is another $1,000 out of pocket. These are things that a good loan officer needs to go over and some don't at first, because they get the client to float, so they seem cheaper.... just a fact. thanks
TIM.. . my pleasure and thanks for stopping by and for reblogging this...
Jeff,
These are very interesting times. The deficit creates long term inflationary pressures, while presently there are deflationary pressures as businesses lower prices for goods sold.
Steve
Jeff: Deflation and a double-dip are either happening now or will happen soon. This will keep rates low possibly until the end of the year at this point. Let's face it. The economy is in bad shape in spite of what our government says. Very few employers are hiring, the stock market reacts to every bit of bad news, and our debt (government) is every bit as high as Greece's. If China hits the skids (their market is off 25% this year), look out. I foresee a very bumpy ride for a couple more years at this point. Thanks for the post!
Great information Jeff. Most think interest rates are going to head up, the big question is when?
This is great information and I have been speading the word!