Mortgage shopping in 2009by Tim Manni
It’s safe to say that our readers and site visitors are already well aware that mortgage rates are at historic lows.
But if you’re going to take the plunge this year and either buy a home or refi your existing mortgage, here are a few things to keep in mind (excerpted from an HSH interview in Business Week):
You have to go back to around 1961 to find a time when 30-year mortgages had rates this low, according to Keith Gumbinger, a vice president at financial publisher HSH Associates in Pompton Plains, N.J. For that, thank the U.S. government, which is trying to jump-start the stalled housing market by buying up mortgage-backed securities. …
In ordinary times, one loan is about as good as another because most lenders’ offers on 30-year loans are clustered within around a quarter of a percentage point. Not now. With the economy so shaky, lenders are all over the map in how much risk they’re willing to take in making loans. So it really pays to shop around. …
Forget what you were told in quieter times about the pros and cons of fixed- vs. adjustable-rate mortgage loans. These days, all the best deals are on fixed-rate loans because that’s the segment of the market that the government has been targeting with support. The securitization of adjustable-rate loans has mostly dried up, so banks don’t want to originate ARMs, therefore they don’t offer attractive rates on them, says HSH’s Gumbinger.
There’s more good advice there, so read the whole thing.