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Posts Tagged ‘variable rate mortgages’

Zillow Reports 5% Mortgage Threshold Has Been Breached

September 16th, 2009 by Krayton M Davis | 3 Comments | Filed in Home Financing
Mortgage rates continue to drop, opening up a door of opportunity for savvy consumers. If you have excellent credit and a good job, you could qualify for a fixed rate thirty year home loan offered at a five percent interest rate.

Mortgage rates continue to drop, opening up a door of opportunity for savvy consumers. If you have excellent credit and a good job, you could qualify for a fixed rate thirty year home loan offered at a five percent interest rate.

Despite the economic uncertainty one fact remains: mortgage loans can be had for at near historic low rates. This is good news for home buyers or for people who want to refinance their current mortgages, provided that they have excellent credit and a good paying job in order to get approved.

Virginia Leads The Nation

The Zillow Mortgage Marketplace, a service of Zillow.com the real estate trends tracking site, says that the average rate for a thirty-year fixed rate mortgage (the most popular choice for consumers) is now down to 5.04%. Importantly, in several states, the five percent floor has been passed, with rates dropping to as low as 4.96% in Virginia.

The move downward follows a trend seen over the past several months. Indeed, the national average dropped from 5.09 to 5.04 just in the past week, showing that even lower rates may be ahead. While six percent is still considered to be an excellent rate for mortgages, when the market drops below 5% the psychological boost can be quite good.

15-Year, ARM Rates Drop Too

15-year fixed rates mortgages are now down to 4.48% while 5/1 ARM have dropped to 4.02%. ARM or adjustable rate mortgages have caused plenty of grief for consumers over the past few years as ultra low rate loans taken out in in 2001 and 2002 have since reset at a much higher rate. Those higher rates have contributed to mortgage delinquencies and a record number of home foreclosures, thus consumers considering an ARM today must take into consideration the possibility of much higher rates in the years to come.

Feel free to search our archives for mortgage tips and refinancing information, details which can help you save money.

Source: Zillow.com

Adv. – Despite rising interest rates, now is still a good time to refinance your home. If your current mortgage offers unfavorable terms, why not explore refinancing while rates remain below 6%? Visit PickMyMortgage.com or SayLending.com to find the best mortgage opportunities out there.


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Fixed Rate Mortgages Trump Adjustables

February 7th, 2008 by Matthew C. Keegan | 1 Comment | Filed in Consumer Financing, Home Financing

On the surface, adjustable (variable) rate mortgages (ARMs) look like a better deal, particularly as these loans allow adjustable rate mortgagesbuyers to afford a larger home and/or receive a lower interest rate on the amount borrowed. Compared to a fixed rate mortgage, ARMs can look pretty decent, but that is only on the surface.

ARMs At Fault — Sort Of

Dig a little deeper and you quickly realize that ARMs are behind the current mortgage crisis. Certainly, some homeowners should never had been qualified for a mortgage in the first place given their iffy financial situation, but for many other people selecting an ARM was a problem for them too. Especially when the first wave of resets (adjustments) kicked in.

Falling Fixed-Rate 30 Year Mortgages

Some homeowners are alarmed that their new, higher mortgage payments is making it difficult for them to keep up. That $2200 monthly payment is suddenly approaching $2700, putting further strain on households already pushed to the limit. Refinancing is an option, something I will cover below.

The recent two-step drop in the benchmark Fed interest rate from 4.25 to 3 percent is a sign that the government is worried about resetting mortgages too and the impact that a rash of foreclosures would have on the economy.

Although mortgage rates don’t necessarily correspond exactly to a drop in the Fed rate (instead, those rates are pegged to long-term bonds) every indication seems to show that a further drop in mortgage interest rates will still happen. How much though is not known.

Your Refinancing Window

Now is the time for all homeowners faced with the prospect of a nasty mortgage interest rate reset to consider refinancing their homes. No one knows how long this refinancing window will stay open or whether mortgage rates will drop much lower, therefore it is imperative if you are seeking relief from your current ARM to consider what it takes to qualify for a new mortgage today.

The longer you delay, the increased likelihood is that you will miss out on a special opportunity. Some homeowners may be waiting for government relief, which may or may not come, but to delay too long could mean that the refinancing window has been shut.

So, how do fixed rate mortgages trump adjustable rate mortgages? That’s easy: they give consumers a predictable, stable monthly payment amount each month for the life of the loan.

Sounds reasonable, doesn’t it?


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