Your Questions About Mortgage Rates Today

Betty asks…

Could mortgage interest rates go lower than they are at today?

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?

admin answers:

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.

Charles asks…

Where can I find today’s rates for a fixed rate mortgage? I’m also looking to see past days for a trend.

I’m interested mostly in 15 and 20 year fixed mortgage rates for the current day and over the past several weeks.
I’m looking for a direct link to a site with this information in a quantified format, without having to fill out any personal info and, in effect, apply for a new loan.

admin answers:

There are so many sites that have this info. Try this one…lots of helpful loan information. Http://loan.divinfo.com/

Lisa asks…

mortgage rates for veteran’s today.?

Can anybody tell me where I can obtain the current mortgage rates for The Veterans Admin. or tell me what it is today, please

admin answers:

I’m a mortgage banker and can tell you. There are no specific rates from the VA because the VA guarantees the loan for lenders like us. The market determines the rates. All else being equal, we’d probably quote 30-year fixed rate at 6.625% with a loan origination point and no discount points, or 6.875% with no points at all, depending on the loan size and state.

Jenny asks…

What is the current mortgage rate today 12/12/08?

30 yr. fixed?

admin answers:

That depends on where you are, what your credit is like, how much of a down payment that you make, and whether or not you pay points among other factors… You will likely find a few different rates from different lenders in any given area. It is important to shop around to get the best rate. Always ask for a GFE (Good Faith Estimate) and a TIL (Truth In Lending) Disclosure. It’s important to note that although these forms are supposed to inform the Consumer, they can be very confusing to read and understand. A good Realtor can generally help you review these papers and identify the best package. Good Luck!

In my neck of the woods, 5.675% with great credit and 20% down (30 yr fixed, conventional)

Sharon asks…

What’s best mortgage interest rate I can get for a “condo/townhouse” in PA today? Are rates higher for condos?

admin answers:

What type of mortgage? FHA/VA, conventional?
30 year fixed, 15 fixed, 5/1arm? Need more details…..

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