Mortgage and other interest rates moved up sharply over the past week, seemingly on little more than optimism that we’ve reached some kind of self-sustaining economic level, and markets reacted as though the Fed has already begun or even finished the “tapering” process of removing QE3. It hasn’t, and even though there are suggestions that they will at some point, there’s no indication that this process is ready to start.
It’s only Jan. 3, but the wheels are already in motion for a busy spring homebuying season. Mortgage rates, home prices and home sales are currently in line to offer buyers some great deals, refinancers low rates and home sellers the opportunity to turn a profit.
Rates on the most popular types of mortgages declined slightly, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by three basis points (0.03 percent) to 3.49 percent. Conforming 5/1 Hybrid ARM rates decreased by five basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.68 percent.
Refinancing your mortgage to a lower interest rate to reduce your monthly payment is one way to pay less for your home. In fact, a lower monthly payment is the driving force behind the majority of refinances.
“For most people who want to refinance, the monthly payment is still their number one concern, says Mark Hanley, a mortgage originator at United Lending in Austin, Texas. “It’s definitely their main focus.”
Last week, we reported the first mortgage rate increase in two months. The conforming 30-year fixed-rate increased by 0.04 percent. The good news is that this week the conforming 30-year fixed-rate is unchanged.
According to our Mortgage Rates Radar, the latest mortgage rates report from HSH.com, while the average rate for conforming 30-year fixed-rate mortgages was unchanged for the week, holding at 3.52 percent, conforming 5/1 Hybrid ARM rates increased by two basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.70 percent.
Question: We refinanced our mortgage of $55,000 in 2005 at 5.5 percent interest for 15 years. For the last year I have been paying an extra $100 to $200 a month on principal. Will it pay off the mortgage a lot sooner if we make a one-time payment of $5,000 toward principal?
This week on the blog it’s been all about mortgage rates. Today is no different. According to the latest Mortgage Rates Radar report from HSH.com, our Wednesday-to-Tuesday wraparound weekly survey, mortgage rates remained mostly unchanged from the week prior.
The average rate for conforming 30-year fixed-rate mortgages was unchanged at 4.00 percent, while conforming 5/1 hybrid ARM rates increased by 3 basis points to an average of 2.93 percent. Read the rest of this entry »
After the markets experienced such devastating declines after the housing market crashed, countless discussions ensued about “when will we return to ‘normal’?” There are two schools of thought when it comes to the markets attaining a degree of normalcy. Either markets have a long way to go to become “normal” once again (regaining levels prior to the crash), or they must establish a “new normal” based on current market conditions and expectations.
For factors like home prices, which never experienced a national decline until the market crashed a few years back (sending millions of homeowners’ equity out the window), the expectation is that prices need to regain those levels to make it back to normal and to salvage all those investments (underwater homes). As far as mortgage rates go, numerous government programs as well as economic hardships established a “new normal” range for rates to wander in over the last few years.
Adjustable rate mortgages (ARMs) were blamed by some financial commentators for the rise in foreclosures, so many homeowners are wary of them. Indeed, only 5 percent of mortgage applications at the end of 2010 were for ARMs. While it’s true that ARMs are a bit more complicated than fixed-rate loans, in an environment of rising mortgage rates, ARMs are especially worth a second look if you’re refinancing.
ARMs offer low initial mortgage rates
It’s not at all unusual to see the mortgage market slow down during the holiday season. Yet this year, the market has become especially quiet due to the presence of rising mortgage rates.
You may be thinking that this latest uptick in mortgage rates is going to cap off an exceptionally-poor year for the mortgage market, but that’s not exactly true. Record-low mortgage rates in 2010 allowed for a substantial number of homeowners to refinance their mortgages and lower their monthly payments: Read the rest of this entry »