Tag Archives: Rates

Your Questions About Mortgage Interest Rates

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Carol asks…

What are mortgage interest rates likely to do in the next day or two?

Today is Wed. 10/8, and my lender just called to tell me rates went up today. We are in escrow and been waiting to lock in because of the bailout plan. My lender said that Bernake (however you spell it) was supposed to lower interest rates but hasn’t done so yet. Any ideas on whether they will go back down, or should I lock in today?

admin answers:

Last I heard…The rate was lowered to 1.5% from 2% this morning. I don’t think it goes into effect until tomorrow though.

Linda asks…

What will mortgage interest rates be at in ten years?

I am purchasing a home, owner financed for 10 years, with a balloon payment. I will then need to get a federally backed loan (bank loan). What do you think interest rates will be in 10 years? I will have paid down the house so shouldn’t need 10% or 20% down.

admin answers:

How could we possibly know?

Maria asks…

Mortgage interest rates – should we lock in now or wait?

We have the choice to lock in a rate now or wait. What do you think? Will mortgage rates go up or down in the next 30 days?

Please provide a source if you have one.

Thanks!

admin answers:

I’d probably lock in a rate. More houses get sold in the summer, and with it warming up, that means more sales. I would think that with more sales, interest rates would also go up. I also hear they will raise the federal debt ceiling, which could also increase interest rates. Like another poster said, this is about as low as they have been in a LONG time. I’d rather lock in now and have to pay an extra .1% than not lock in now and end up paying a lot more later own. Let’s face it, they cant go down much from here, but they sure can go up a lot.

Just my thoughts, Im not a loan officer or anything

Laura asks…

In general (not at the moment!) why are mortgage interest rates so low?

I’m not discussing the current prices / market etc. Was just wondering why mortgage rates are so low, when compared with such as credit cards that can go upto 20 odd % interest.

admin answers:

A mortgage is supposedly a secured debt. The bank can theoretically get their money back even if the borrower fails to pay their debt. Credit cards are unsecured debt and banks frequently get stuck holding the bag. So they charge much more. Clearly there’s a big penalty for not keeping up one’s payments.

Sandy asks…

If mortgage interest rates rise sharply, say to 10%, what effect will that have on the value of real estate?

For example, if I purchased a house today for $100,000, at 6% interest, what could I sell the house for when mortgage interest rates hit 10%?

admin answers:

The intrest rate rising may cause property devaluation because fewer people will buy homes, and they will set on the market. Thats the only way I see that the % rate could effect values, but then again maybe a mortgage/realtor type will have a better answer.

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Your Questions About Mortgage Rates

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Ruth asks…

Why do mortgage rates go up when the term goes up?

I’m looking at mortgage rates for closed term, ranging from 6 months to 10 years, and I’ve noticed that the rates actually increase as the length of the term gets higher. Why is this the case?

admin answers:

The general “rule” in banking and in finance is that the longer the loan, the higher the interest rate.

The reason is that the lender takes on more risk with longer term loans. For example, if the lender commits to a fixed rate 10 year loan to you, but rates rise sharply within 3 years, they lose out on getting that higher interest rate. (conversely, if rates fall, then the bank wins on that fixed 10-year loan to you).

(BTW this sounds like a type of mortgage offered in Canada. Also, interest rates are relatively low now, even if rates are up slightly from a month ago. And, the general fear is that interest rates in Canada will go higher in the years ahead. So locking in something fixed now is a good deal for us the consumers, in my opinion).

Betty asks…

Is it true that Mortgage rates go up usually in summer and come down during the end of the year?

Hi,
I am a planning to get a home in Bay Area. Is it true that Mortgage Rates usually go up in summer and eventually calm down during the end of the year?

Thanks

admin answers:

Sounds like hogwash to me…I suppose in theory the demand for housing may be heavier in spring and summer in some areas…and someone is trying to say that housing demand influences mortgage rate in some way…but I doubt it’s true…certainly not everywhere and at all times.

Mortgage rates fluctuate according to the bond market — supply and demand of money and credit. Predicting the Bond Market is almost as impossible as predicting the Stock Market. Professionally, baring unforeseen circumstances (a HUGE qualification, BTW) , I would hazard to guess that tomorrows market will look a lot like to days market. Beyond that, only a fool would make a prediction backed by serious money…

Laura asks…

What are current calgary mortgage rates at?

I’m refinancing my home and I want to know what current mortgage rates are at in calgary? I’m not sure I want variable I think I want to go fixed. My credit is good.

admin answers:

On the fixed rates here are the average rates as of today – they are always changing!

1 year – 3.25%
2 year – 3.90%
3 year – 3.85%
4 year – 4.10%
5 year – 4.15%
10 year – 5.25%

And I know you said that you were asking about the fixed rates but just for info that variable rate is prime 2.5 + .8 (3.30) which is common right now.

Check out www.mortgagebrokerate.com if you want to keep up with the current mortgage rates for calgary, alberta and canada.

Thomas asks…

What affect will the government bailout have on future mortgage rates?

We are currently building a home and won’t actually secure the financing until February or March of 2009. What is the likelihood mortgage rates will go down and by how much? We plan on locking in a rate, but don’t want wait too long before they start going up.

admin answers:

You should be able to get a lock with a float down option. That is, you can protect yourself from rising rates by “capping” your rate. If rates are lower once the house is substantially complete, you can float down to the market 30-60 days prior to closing.

No one can say what will happen with rates with any certainty except they will change. However, it stands to reason that the rates should get better because now the Fed is explicitly guaranteeing Freddie and Fannie obligations so the yields on those securities (which drive retail rates) should fall until they are approximately equally to Treasury securities of the same maturity. At present, there is a 1% difference in the yields. The markets should adjust until that spread is substantially reduced. Otherwise, a smart investor would prefer mortgage backed securities over Treasuries as they have a higher return with no additional risk.

For some reason, the markets have not reacted fully to this change, but that may be because the bailout is still up in the air. Freddie and Fannie assets are not the toxic assets involved in the bailout generally speaking, but they have lost favor with Foreign investors in particular since the crisis began.

In short, you may not need to worry about what will happen with rates provided your rate lock allows you the option to float down once the home is nearly complete.

Good luck.

Chris asks…

What is the deal with mortgage rates advertised on Yahoo Finance or Bankrate?

It seems that when I call to inquire about these good deals (for example, really low rates with 0 points), I am always told something like, “Well, that deal is for something else.” How does one get an accurate mortgage quote online from these sites? Or is it impossible to get an accurate quote without calling the companies directly?

admin answers:

This is a example of how the lenders try to get the business from the people like you. They advertize low rate, but if you call them, this rate is not for you, because your credit is not good or you don’t have enough equity or down payment. Every costumer is diferent and those low rates are reserved for the best costumers or they are not available now, because market change and rates go up ( sometimes they change 3 times a day). Please be carefull about applaing for the loan over the internet, because if you will put your info- you will be bombarded with emails and phone calls from diffrent lenders. My advice- call the local bank or broker to find out about rate for your situation and they will be more like to explain to you why this or that.

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Your Questions About Mortgage Rates

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Carol asks…

How do current mortgage rates help new home builders?

I’d like to buy new construction as a result of the great mortgage rates right now. However, by the time I’d close on my house in December, it could be a totally different ballgame and rates could go through the roof. It seems to me, then, that low mortgage rates only help people refinancing or buying an existing house.

admin answers:

Most economists predict that interest rates and home mortgage rates will remain low for some time to come. There may be some slight increases later in the year as the economy and the housing market improve but the rates are at record lows and now is the perfect time to buy a new home.

Have you spoken with a lender? It is possible to lock-in a rate for a small fee and thereby guarantee that you will not see substantial increases.

Donald asks…

Why do mortgage rates keep going up after the Fed lowers their interest rate?

We’re in the market for a house, and it would seem that the lowering Fed rate would trickle down to the mortgage business. Instead, those rates keep going UP! How do they expect people to help out the economy by buying homes when they keep making it so unattainable and unattractive?

admin answers:

Mortgage rates are not driven by fed rates. They are driven by the bond market, which competes with mortgage backed securities for capital. Investors need to buy the mortgages from the originators, and the rates are determined by their pricing models.

As a previous poster noted, mortgage rates follow the 10 year treasury most closely. The spread between the 10 year and mortgage rates has been increasing due to increased fears of inflation (which the fed cuts make even worse) and the general perceived riskiness in the mortgage market (forclosure rate?). As such, investors are saying they’d rather invest in other securities because the rates are not paying them enough for the risk they are taking. That is why rates sometimes go up when the fed cuts.

Mandy asks…

What are the current mortgage rates like and are there any signs of the mortgage rates changing soon?

I’m looking to get the best current mortgage rates available because me and my wife are looking for our first home purchase. Can anyone point me in the right direction?

admin answers:

There is no such thing as a standard rate as there was 20 and 30 years ago. The rate you get depends on your credit rating, the type of loan you want, the down payment you put down, the points you pay up front to buy the rate down and other things.

The very best thing you can do is ask friends and family that have gotten mortgages recently and is happy with the service. Even large mortgage companies have crooks working for them- use someone local, competent, and recommended. The rates are very similar between companies because they are all getting their money form the same source.
*************
I think that rates will remain low for a while. But when we start recovering from this recession I think inflation will jump quickly and the mortgage rates will also.

Jenny asks…

What is the best way to shop for mortgage rates?

I have been pre-approved by a local very large bank known for their mortgages of which I am a customer. I know the lender.

Once my short sale is approved I will get my first rate & points from him. Then is it best to shop on the internet or go in person to other banks? Do credit unions or online mortgage companies offer better rates and less points than nationally known banks?
Very good suggestions. Thank you all for your ideas.

admin answers:

Generally credit unions offer very good rates because they are non-profits so they have lower costs. I particularly like the Navy Federal credit union and the Pentagon Federal Credit Union.

The first thing to do is to get your credit report for free at www.annualcreditreport.com and check what is on there to make sure your report is accurate. If it is not, and there are negative items on there, get those cleaned up.

If you are a first time homebuyer, check on www.hud.gov or at the department of housing in your city or county to see if there are any special deals for first time homebuyers. I got a mortgage under something called a “mortgage credit certificate” that saved me 20% off of the interest costs.

If that doesn’t work, try to do all your rate shopping within a 2 week period of time, so it has the least effect on your credit score.

There is a “homebuying for dummies” book you can get at your library that has pretty good advice on how to shop for a mortgage. The biggest thing is to make sure you compare APR (annual percentage rate) not just the rate quoted, because sometimes a low rate comes with huge amounts of fees and points, and they offset the low rate.

Mark asks…

How does the unemployment rate affect mortgage rates?

from regression analysis I found that there is a strong positive relationship between the unemployment rate and mortgage rates. I can’t figure out why. Any thoughts?

admin answers:

You need to be careful, mortgage rates are prospective rates and unemployment data is retrospective data. Data collected at time t may in fact reflect time t-1 and forward rates at time t+359. Further, the mortgage market has itself changed over time being deposit funded and insurance reserve funded twenty years ago and mutual fund owned today. That creates different owners with different liabilities.

Finally, time series regressions are very difficult to do correctly. It is an entire field in itself.

Unemployment is related to bond prices because higher unemployment levels tend to result in lower inflation, which makes bonds safer and permits higher bond prices, so there should be a positive relationship with prices but a negative relation with rates. However, a mortgage could be thought of as 360 forward obligations and the current unemployment level does not reflect future beliefs about the economy in a direct manner.

If you find a positive correlation that is very strong, there is also a possibility that you have a unit root problem and your t-tests are misspecified. The significance could be spurious. It partly depends upon whether the relationship is stationary or not. If you are running your tests using an ordinary statistics package, it is likely your correlation method is invalid.

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Borrowers adjust to higher rates.: An article from: Mortgage Banking

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This digital document is an article from Mortgage Banking, published by Mortgage Bankers Association of America on January 1, 2005. The length of the article is 862 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

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Borrowers adjust to higher rates.: An article from: Mortgage Banking

The Random Character of Interest Rates. : An article from: Mortgage Banking

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This digital document is an article from Mortgage Banking, published by Mortgage Bankers Association of America on November 1, 1990. The length of the article is 791 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

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The Random Character of Interest Rates. : An article from: Mortgage Banking

Key economic indicators and interest rates.: An article from: Mortgage Banking

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This digital document is an article from Mortgage Banking, published by Mortgage Bankers Association of America on April 1, 2009. The length of the article is 385 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.

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Key economic indicators and interest rates.: An article from: Mortgage Banking

House Poor : Pumped Up Prices, Rising Rates, and Mortgages on Steroids: How to Survive the Coming Housing Crisis

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The housing market, like any other investment, has always had its ups and downs. But ever since it started its upswing at the beginning of this decade, the ride has become more thrilling—and more dangerous. One day, home values are skyrocketing and cheap money is up for grabs; the next day, houses linger on the market and interest rates rise alarmingly high. Home buyers and sellers are beginning to recognize that however the market moves where they live, they mus… More >>

House Poor : Pumped Up Prices, Rising Rates, and Mortgages on Steroids: How to Survive the Coming Housing Crisis

Best Mortgage Rates Refinancing

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The truth of the matter is no one can actually bear down upon when best mortgage rates are going to bottom out. If you are looking for the best mortgage rates refinancing, going online for your searches will help you a lot. Instead of trying to approach when mortgage rates will bottom out you can save yourself thousands of dollars by concentrating on what aspects of your mortgage rate you can control. Find the best mortgage rates refinancing for cash out or a loan then stick with it.


Home mortgage rates are at near all time lows and quite a few of you might be wondering how to bear upon when they will bottom out. Mortgage interest rates are downright difficult to fall in with. Mortgage loan refinancing in Britain can be a good thing or a bad thing, depending on your personal circumstances.


For selecting a lender that offers low mortgage rate refinance, the first thing you have needed to do is to contact as many lenders as possible and solicit fixed rate refinance quotes from each one of them. Take a look at an amortization table to be cognizant of why-for lone type of mortgage loan, quite a few of the interest is paid at the beginning. Points paid on a purchase mortgage can be deducted upfront, but points paid on a refinance are handled differently. These have on to be deducted over the loan’s lifetime.


A home equity loan puts your house to work for you, creating a personal loan borrowed against the value of your home. To go into training home equity loans, borrowers are obliged to first discover the concept of equity


When you set up a mortgage loan refinancing in Britain for home active use, you are borrowing against the equity of your home. This means, again, that you will be paying on your home longer. If you refinance for a lower rate but it is adjustable, you could wind up paying more. You should only do this if you accept a lower fixed rate on your mortgage loan refinancing in Britain.


To do an effective, cost-conscious mortgage refinance, first settle on your cope with-even point, or how long it will take to start gaining a positive return on your investment of the costs of refinancing. There is never a bad time to invest in property or real estate.


Historically, property has always raised in price regardless of whole short term trends. The broker arranging your mortgage gets paid in two ways. They let paid by charging you an origination fee for their work and they make paid by marking your mortgage rate up for a kickback for lender.


If you find the best mortgage rates refinancing take it and run with it. Chances are you will not find another low rates that may suit your liking.

Finding The Right Mortgage Loan– Consider Options On Mortgage Interest Rates

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During the past decades, it was a common thinking that a mortgage loan is a mortgage loan no matter whichever is chosen– it was thought that there is no option on mortgage interest rates. But this way of thinking is not applicable anymore because of the many mortgage loan products with varied mortgage interest rates available in the market.


So, before choosing a mortgage loan or any other personal loans, it is of great importance to decide which one is right for you. Finding the right mortgage loan means balancing your mortgage alternatives with your housing requirements and financial picture, now and in the future. Also the right mortgage is not just having the lowest mortgage interest rate but much more than that. And this “much more” will be determined by your personal condition. Your personal situation and your limits to pay for monthly mortgage obligation can be evaluated by answering the following questions:


1. What is your current financial status (this would includes income, savings, cash reserves and debt-to-cash ratio)?

2. How you expect your finances to changeover in the coming years–your improvement in terms of financial stability?

3. Have you plan to return the mortgage loan before your retirement?

4. How long you plan to keep your house?

5. How comfortable you are with your changing mortgage payment amount– are you able to manage flexible payment?


The answers to these questions will give you the knowledge of your financial condition. Now the next step is to decide two key options:


1. Mortgage length,

2. Type of mortgage interest rate (fixed interest rate or flexible interest rate).


The length of mortgage loan can be 15 years (minimum); can be 20, or at 30 years (maximum). While choosing a fixed or adjustable mortgage interest rate you should be aware of the facts that the adjustable mortgage interest rate is more risky because the interest rate will change, while a fixed-rate loan offers more stability because of the locked-in rate.


You will be able to pay off a shorter-term loan more quickly, but your monthly payments will be substantially larger. Long-term fixed-rate loans are well-known because they offer certainty, and many people find that they are easier to fit into their financial budget. Though, in long run they will cost you more, but you will have more available capital when you need it, and you will be less likely to default on the loan should an emergency comes.


In the light of above mentioned ideas and constraints, it is clear that the key to select the appropriate mortgage loan or any other personal loan for your needs should fit comfortably into your entire financial condition, that is having payments within your budget and comfortable level of risk connected to it.

To read more,visit http://www.moneyinfo101.info/

The Need for Lowest Mortgage Rates

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It is natural for majority of the populace to desire anything at a lower cost and the same principle is mirrored on why there is a need for lowest mortgage rates. The ability to procure something at a bargain can be regarded as an achievement by some people, especially those that are budget conscious. A mortgage that offers an affordable interest rate is the dream of most people who want to own their own homes. Those who are willing to put up with a second mortgage or apply for a loan designed for home equity need the same. Therefore, as much as possible, potential debtors are seeking to find the lowest mortgage rates in the market.

The techniques on how to find the lowest mortgage rates will vary from one potential borrower to another. You should remember, though, not to grab the first plan proposed to you since there may be a better one obtainable. You can ask a real estate broker on the available financing schemes. Most often, financing companies have tie-ups with property developers to facilitate a smooth transaction. Such alliance could result to lower interest rates as opposed to others that function independently. Competition among the real estate players could likewise bring about competitive rates hence you can pick the lowest mortgage rates offered. Comparing is essential when deciding on what loan terms to pursue.

Referral is another effective way of getting the lowest mortgage rates, from people in your workplace to your friends and relatives. You ought to be cautious though because the same provisions and conditions might not be applicable in your case. Financing companies utilize different criteria when evaluating the applications of prospective mortgagors. The factors under consideration encompass both external conditions as well as issues concentrating on the potential borrower. Relevant would be your credit background – whether you have accumulated a huge debt, repayment capabilities, or credit risk, among others. The country’s economic conditions will also be influential as a booming economy means more opportunities for its citizens and higher chances of bagging the lowest mortgage rates.

The Internet is another good source in learning what are the prevailing interest rates connected with financing activities. You can browse through the sites and make a table to determine the lowest mortgage rates. You should not take everything at face value and must read carefully the fine print. It might turn out that you will be paying much higher from your allegedly low mortgage rate. Be conscious about hidden charges or other add-ons that will increase your monthly payments and adversely affect your allocated budget. There are a variety of mortgage programs, thus you ought to select the most appropriate one in accordance to your requirements. Searching for the lowest mortgage rates can be difficult but possible to attain.

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mistakes and predatory lenders . For more articles and resources on

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