After rising steadily for the last 3 weeks mortgage rates fell back down this week. The 30 year rate fell from 5.03 to 4.98. The 15 year rate fell from 4.46 to 4.40. The 5 and 1 year arm fell from 4.42 to 4.35 and 4.57 to 4.47 respectively. This looks like more of a hiccup as mortgage rates steadily start there rise. At this point the overwhelming consensus is that mortgage rates are going to rise in the next six months. But the lowered rates do provide an opportunity for potential homeowners to lock in rates at sub 5.00 rates. Below are rates from the weeks from October 8, 2009 to November 5, 2009.
Nov 05, 2009
30-fixed 4.98 15-fixed 4.40 5-yr 4.35 1-yr 4.47
Oct 29, 2009
30-fixed 5.03 15-fixed 4.46 5-yr 4.42 1-yr 4.57
Oct 22, 2009
30-fixed 5.00 15-fixed 4.43 5-yr 4.40 1-yr 4.54
Oct 15, 2009
30-fixed 4.92 15-fixed 4.37 5-yr 4.38 1-yr 4.60
Oct 08, 2009
30-fixed 4.87 15-fixed 4.33 5-yr 4.35 1-yr 4.53
Apr 16, 2009
30-fixed 4.54 15-fixed 4.93 5-yr 4.83 1-yr 4.82
As has been the case for several months the interest rate to watch is the 30 year rate. When rates are low (and the expectation is that they are going to rise) there is no real reason to look at short term ARMS.
In addition to looking at rates we also calculated the mortgage payments for a 200k loan based on today’s rates.
This show how little rates have moved in the last two weeks. For a 30 year loan on a 200k mortgage the payment is $2.45 less a month for a decrease of about 1/5 of 1 percent
So what is our advice? First I would avoid anything but a 30 year mortgage. Their is simply too much of a chance of higher rates. Second I would start looking for a mortgage earlier in the process instead of later. Basically their are too many issues with lending right now and it’s a good idea to find out any issues to get a loan earlier in the process. Second it’s a good to check into the 7,500 tax credit. The new program has expanded the eligibility so if you didn’t qualify for the 8,000 tax credit you might qualify for the new one.