Archive for Mortgage Rate Articles
Should I Get a Fixed Rate 30-Year Mortgage?
Posted by: | CommentsWhat are the advantages of 30-year mortgage rates? Many new home buyers like the lower starting interest rates available on adjustable rate mortgages. They see these hybrid ARMs as a big advantage, because the rates are fixed for a period of years before resetting to a variable interest rate. It allows them to qualify for a larger home. However, an ARM has distinct disadvantages when it comes to managing your personal finances and keeping your house payments under control.
Here are some of the advantages to consider with a fixed rate 30-year mortgage:
- The interest rate remains constant. If you fix your mortgage rates at the lowest fixed 30-year mortgage rates in decades, you will have the same rate for the life of the loan. That means you are not going to see a minor rate adjustment on an ARM loan make your payments outrageous.
- Payments remain constant. When interest rates start rising, it becomes difficult to refinance an adjustable rate mortgage. Borrowers will start seeing, their mortgage rates start going up. Let’s look at an example. A mortgage of $300,000 with an initial mortgage rate of 4%, you will have a payment of $1,432.25 per month. If that rate goes up to 6.5%, the payment goes up to $1896.20. If the rate goes up to 9%, the payment goes up to $2,413.86. If you got a fixed rate 30-year mortgage at 6%, the payments would be $1798.65 with no chance of adjustment.
- Budgeting is easier. You have a fixed payment. You know that each month for the next 30 years. You will need to pay $X. As your income increases over time, that amount stays the same. You can use the extra income to save for retirement or to pay down the principal on your mortgage. The choice is completely up to you.
- A fixed rate 30-year mortgage allows you to weather rate changes with grace. One of the biggest problems in recent real estate troubles is the adjustable mortgage rates that started going up. A single percentage rate chance can make your payments jump quickly. With a 30-year mortgage refinance, that is never a concern. Your neighbors will sweat while you smile and shake your head.
These are a few of the advantages of a 30-year fixed rate mortgage refinancing. With that fixed payment amount, you will only need to adjust payments as your escrow changes. Your principal and interest will remain the same. You can pay the loan ahead with extra money you get. However, you will never have to scramble to make a mortgage payment that just jumped by a couple hundred dollars a month.
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When Will Home Loan Rates Rise?
Posted by: | CommentsCan home loan rates stay this low forever or is it just a matter of time before interest rates start creeping up? Did you know that fixed rate 30-year mortgages have averaged below 5% for 13th consecutive months?
If you have been considering financing a new home buy or doing a home refinance transaction, you might want to do it sooner than later. There are several reasons that most mortgage executives believe that home mortgage rates will rise in the months ahead.
- When the Economy Rebounds the Federal Reserve is sure to begin Raising Rates
Although the Obama administration claims that the economic recovery began the summer of 2009, many economists do not agree because unemployment has remained high. As soon at the unemployment rate begins to fall and corporate profit margins start to grow, you can expect the Fed to shift gears on keeping the interest rates low. . - When the Housing Market Rebounds
As American consumers begin to do better financially, it raises the demand for housing. Likely this will drive house prices and mortgage rates higher. Many first time home buyers have really benefitted from the low FHA mortgage rates, but that can’t last forever. - Inflation Will Drive Interest Rates Upward
With food and energy prices continue to rise, it will be difficult for the Federal Reserve to keep the rates this low for long. In addition, if this low rate trend continues much longer, mortgage lenders will need to protect their profit margins and be forced to hike mortgage rates.
The bottom line is that mortgage interest rates can’t stay this low much longer. Expect conventional and government lenders to begin raising rates for home buying and mortgage refinancing later this year or early 2012
Timing the Lowest Mortgage Rates
Posted by: | CommentsAmerican consumers are notorious for wanting the best deal, so when borrowers tell you they are waiting to get the lowest mortgage rates we should not be surprised. With 30 year fixed rates falling below 4% last month, we may have found the bottom of the mortgage rate graph. Since then, home loan rates have teetered back and forth, but all signals point towards a trend of rising rates in 2011 and beyond. Of course if the economy continues to sputter you could expect low mortgage rates, but it is doubtful we will see the 30 year fixed rate mortgage below 4% anytime soon. The fact remains that the lowest mortgage rates in 2010 can be attributed to the Federal Reserve and the U.S. Treasury buying the bad credit mortgage portfolios from banks and lenders even as the default rates were rising.
Will Mortgage Rates Get Lower?
A few mortgage lenders are offering the fixed 10 year mortgage in the 3.5% range, but how many Americans have the ability to afford the higher payment that comes with a ten year amortization schedule? The 15-year fixed mortgage is a bit more realistic and great choice for those borrowers that can see retirement in the near future. Still with the writing on the wall, why are do so many Americans continue to wait for mortgage rates to get lower?
According to BofA’s, Jeff Moran, “A lot of people have been rejected from loan refinancing or home buying in the last few years, so many of these people may be a little tentative about facing the scrutiny of a mortgage lender. Moran continued, “Many consumers were taken back by the tighter guidelines for home loans and many applicants simply do not meet the new requirements for refinance or home purchase loans.”
The bottom line is that waiting for rates to fall again is very risky. When you look at a thirty year graph highlighting the trends of mortgage rates you can see that it is far more likely that rates will rise than they will fall. Borrowers waiting on the sidelines for lower rates for home financing could be waiting for decades. Still many consumers appear to be just fine sitting on the sidelines, waiting for lower mortgage rates to appear. Nobody knows for sure, but if you have the ability, I suggest locking into a mortgage that you are comfortable sooner rather than later.
Current VA Rates
Posted by: | CommentsEven has the Federal Reserve committed to keeping the interest rates low, VA lenders reported that the current VA rates were up from the November 2010 record lows. Yes the VA rates have crept up over the last month, but the reality is that they are still available at extremely low VA interest rates.
Many veterans fear that VA rates will rise significantly in 2011 and 2012, so the activity remains steady, as a high volume of vets have been applying for a VA refinance. Even the home buying inquiries have risen dramatically and that is unusual for January.
Will VA Mortgage Rates Rise in 2011? Nobody really knows for sure, but since the VA rates fell to 50-year low last November, it’s more likely that the rates would rise rather than fall.
What does this mean for you? It means that if you are eligible for a VA loan and you want to buy a home, now is the time. Waiting for rates to get lower is silly, because if you get a loan now and the VA rates do happen to drop, then you can always take advantage of the current VA mortgage rates with the streamline refinance.
Low San Diego Mortgage Rates
Posted by: | CommentsSan Diego Mortgage Rates Decline!
The California home sales remain flat, but with sales prices down and San Diego mortgage rates at record lows, 2010 looks like a great year for buying a home in Southern California. For consumers interested in mortgage rates in San Diego, California you will be happy to know that California mortgage loan options are still very affordable. Below are the home mortgage rates as of 1:00 P.M. today in San Diego, California. The California mortgage rates on the 30-year fixed rate term ranges from 4.32% to 5%. For new Southern California home buyers you will be pleasantly surprised with the San Diego home loan opportunities.
| Lenders | APR | Rates |
| National Average | 4.894% | 4.75% |
| Wells Fargo | 4.848% | 4.75% |
| Nationwide Mortgage | 4.615% | 4.5% |
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For borrowers who have been waiting to refinance, our Nationwide Lenders strongly recommend converting any variable rate mortgages into a fixed rate mortgage while money is so discounted. |
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California loan applicants can choose between FHA, VA, conventional and jumbo home mortgage loans. California home loan rates fell again, marking the 7th straight week of record low interest rates. California VA home loans are available to eligible veterans at mortgage rates starting at 4.125%. California FHA loans are available to qualified loan applicants starting at 3.75% (5/1 ARM). There is no doubt that if you can qualify for mortgage loan that this is the best time to lock into a lowest 30-year mortgage rate.
Best Mortgage Refinance Programs
Posted by: | Comments2010 has been a great year for mortgage refinance rates! Sure lenders and banks have tightened their guidelines but home refinancing rates have fallen to record lows. If you qualify you will be rewarded with a lower mortgage rate, a reduced monthly payment and better fixed rate terms. If you need a stated income refinance, chances are you will need to wait for lenders to release new refinance programs.
Below, we listed the best mortgage refinance loans so you can have a better idea on what is out there before you begin shopping lenders online:
FHA Mortgage Refinance – The most popular refinance loan this year because it is flexible with credit and not much equity is required. The FHA streamline does not allow you to finance closing costs anymore, so we suggest sticking with the traditional FHA refinance loan because rates are available below 5% with no pre-payment penalties. FHA allows cash out to 85% loan-to-value.
Conventional Refinance – This is a great refinance loan for borrowers with credit scores above 700 and at least 20% home equity. There is no private mortgage insurance like FHA loans, so you will get the best of both worlds. Most conventional lenders will allow cash refinancing to 80% LTV.
VA Mortgage Refinance – If you are active in the Military or a retired veteran you will love the VA refinance opportunities. VA offers the VA streamline refinance that allows borrowers who already have a VA mortgage to refinance with reduced lending fees. No appraisal is required, so you save money and do not need to have any equity. No other lending program allows you to go above 100% loan to value and required no appraisal. VA enables cash out refinancing to 90%. The VA mortgage refinance program will even allow you to skip a payment.
Whichever mortgage refinance loan you choose, know that you are locking into the lowest fixed rates seen in a generation. Contact Nationwide for a free rate quote and refinance analysis with no obligation.
30-Year Fixed Rate Home Loans and 5-year ARMs Fall to Record Low
Posted by: | CommentsInterest rates on fixed rate 30-year home loans for refinance or purchase officially hit record lows today! On Thursday, Freddie Mac released their report that also indicated the 5-year adjustable-rate mortgage dropped to record lows this week acccording to the survey of conforming mortgage rates. The 30-year fixed rate mortgage reported averages of 4.69% for the week ending June 24th. This was lower than the low rates of 4.75% from the previous week and 5.42% a year ago. Fifteen-year fixed rate mortgage loans averaged 4.13%, down from 4.20% last week and 4.87% a year ago. The 10-year fixed rate mortgage has fallen to 3.75% and 3.875% on the no cost mortgage option.
VA home loans are still available at record low rates as well. If you already have a VA mortgage and want a lower rate talk to one of our VA lenders about qualifying for the VA streamline.
Freddie Mac Says Lowest Fixed 30 Year Mortgage Loans Since They Began Recording Rates in 1971
Conventional and FHA mortgage lenders reported averages of the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.84% this week, down from 3.89% last week and 4.99% a year ago.
One-year Treasury-indexed ARMs averaged 3.77%, down from 3.82% last week and 4.93% a year ago. While not a record, this is the lowest the ARM has been since the week ending May 6, 2004, when it averaged 3.76%.
To lock into these home mortgage rates, the 30-year fixed-rate mortgage and both ARMs required payment of an average 0.7 point and the 15-year fixed rate mortgage required an average 0.6 point. A point is 1% of the home loan amount, charged as prepaid interest. According to Frank Nothaft of Freddie Mac “Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the home-buyer tax credit”. “Freddie Mac began collecting rates for 30-year fixed loans in April 1971, 15-year fixed home loans in September 1991 and 5-year ARMs in January 2005.”
