Mortgage Rates Spike Up Rapidly

Mortgage Rates spiked up this week. The 30 year rate jumped from 4.91 to 5.29. This is the highest we have seen mortgage rates all year. Last week mortgage rates moved from 4.82 to 4.91 last week. What is interesting is that in two weeks mortgage rates have moved from near all time lows (the all time low was 4.78) to the highest point of the year. The 15 year rate moved up from 4.53 to 4.79. We did not see as much movement in the arms. The 5 year arm rose from 4.82 to 4.85 and the 1 year arm moved from 4.69 to 4.81.

Two weeks ago 30 year rates and 1 and 5 year arms were all hovering around 4.8 making the arms somewhat pointless. There is no reason to get an ARM when one can get a 30 year fixed mortgage for the same rate. With the sudden rise in the 30 year rate the arms have become relevant again. I still think the 30 year mortgage product is preferable over the arms even at current rates. Although 30 year mortgage rates have risen the expectation is that they will continue to rise for the rest of the year. Below are rates for the last few weeks as well as from 6 months ago.

Jun 04, 2009

30-yr 5.29 15-yr 4.79 5-yr ARM 4.85 1-yr ARM 4.81

May 28, 2009

30-yr 4.91 15-yr 4.53 5-yr ARM 4.82 1-yr ARM 4.69

May 21, 2009

30-yr 4.82 15-yr 4.50 5-yr ARM 4.79 1-yr ARM 4.82

May 14, 2009

30-yr 4.86 15-yr 4.52 5-yr ARM 4.82 1-yr ARM 4.71

May 07, 2009

30-yr 4.84 15-yr 4.51 5-yr ARM 4.90 1-yr ARM 4.78

Dec 04, 2008

30-yr 5.53 15-yr 5.33 5-yr ARM 5.77 1-yr ARM 5.02

In addition to mortgage rates we also like to look at mortgage payments. Using our mortgage calculator we translated today's mortgage rates into a monthly payment on a 200k loan. We did the same thing with rates from last week and rates from December 4, 2008 (6 months ago).

Jun 04

30-yr $1109.36

15-yr $1559.79

5-yr ARM $1055.38

1-yr ARM $1050.53

May 28

30-yr $1062.66

15-yr $1533.05

5-yr ARM $1051.74

1-yr ARM $1036.07

Dec 04

30-yr $1139.34

15-yr $1616.18

5-yr ARM $1169.68

1-yr ARM $1076.08

Usually there is not too much difference from week to week. That is not true this week. The payment on a 200k loan has risen 46.7 or about 4.4 percent. Payments are down 2.63 percent from what they would have been 6 months ago.

So what is our advice to people looking for a home? Unfortunately I think mortgage rates will continue to rise so it's probably best to lock in rates now. Second although arms are a viable option I would still take the 30 year rate over the 1 or 5 year arm. There are some expectations this recent rise is just the tip of the iceberg and we could see rates above 12 percent before this is over with.


Ki maintains a website about Austin Texas. His site also provides information on mortgage rates along with a free mortgage calculator.

The Foreclosure Crisis Hits US Tenants

Boise real estate professionals have been surprised to learn that the wave of foreclosure-related incidents, which have been sweeping across the US are not only affecting homeowners but renters as well. Recently everyone has become aware of how the mortgage and housing crisis is affecting mortgage companies and homeowners, not many people realize that renters are being evicted in record numbers due to the fact their landlords have fallen behind on their monthly mortgage payments.

Landlords and banks have no legal obligation to notify tenants when leased or rented properties enter foreclosure. Often times they are unaware that there is a problem until it is to late. Many come home to discover an official eviction notice from the bank posted on the front door.

To make things worse, many of these displaced renters lose out on cash security deposits because some desperate landlords have pocketed the money and vanished. Now the tenants have to come up with extra cash to start over again, which means money for deposits, first months rent, and moving expenses. How many of you have enough money saved to move if you were suddenly evicted?

Those reentering the rental market find that due to a shortage of available rental units, finding comparable housing in the same price range is a challenge. Millions of homeowners have moved from homes because they sold them to avoid foreclosure or lost them to repossession. Those former homeowners are now renting or leasing, adding significantly to the number of renters in the USA. But during the 2000s, as home prices surged, builders and developers focused on single-family construction and shifted away from the creation of rental units. So the rental market is experiencing a sudden spike in demand at a time when the supply is inadequate. That bodes well for investors who are landlords, but puts additional obstacles in the path of evicted tenants quickly and urgently seeking affordable housing options.


BoiseRealEstateInfo.net provides resources, statistics, and information for home buyers looking to Buy Boise Homes.

SVR -v- Fixed Rate Mortgages - Is it Time to Switch?

If you're currently better off thanks to your mortgage provider's low standard variable rate (SVR), you probably won't be considering a switch to a new mortgage deal. However, with fixed rate deals currently at a low level, and the possibility that interest rates will start going up, you may want to think again.

What's next for rates?

No-one knows when - and how quickly - the base rate will rise, but it is quite possible that the next move will be upwards.

In fact, while the Base Rate looks set to remain at its current level for some months yet, it is widely anticipated that inflationary pressures will ignite a series of hikes potentially later this year - and on into 2010.

If rates do move up rapidly, this could prove very uncomfortable for anyone still on a variable rate - and particularly for those who have got used to making reduced monthly repayments.

Negative Equity

House prices are low at the moment, and are likely to still be low when rates do start to rise, which means that many homeowners will be at the mercy of higher interest rates without being able to remortgage, because of insufficient equity, or negative equity.

Negative equity is where the amount you have borrowed from your mortgage lender exceeds the value of your property - and can make it very difficult to remortgage. This is one reason why you might want to consider taking action before you find yourself in this situation.

Benefits of an SVR

As SVRs are typically around 2% above the Base Rate, this historically meant an expensive hike in mortgage repayments at the end of a mortgage deal period, which also meant you could usually save money by switching to a new deal. However, with the base rate on hold at an all-time low of just 0.5%, some lenders' SVRs have decreased dramatically - prompting many borrowers to delay tying into a new deal.

Nonetheless, while cheap SVR deals can be favourable for the short term - as this means low monthly repayments - these deals could become unaffordable very quickly if interest rates start to go up again, as your monthly repayments could rapidly rise.

Benefits of a Fixed Rate Deal

As it's unlikely that longer-term fixed rates are going to get much lower, homeowners might want to consider locking into a fixed product. A fixed rate mortgage lets you know exactly what your monthly repayments will be for the length of the deal, and allows you the peace of mind that repayments won't rise during that time.

Given that fixed rates have fallen quite a lot in the past year (five-year fixes at less than 5% are currently available), if you are interested, make sure you shop around for mortgage deals to find the right one for you.

And finally-

Before taking the plunge, make sure you do the maths to work out how much you could be paying on your SVR if rates start to climb, and then compare this with any potential savings you could make by remortgaging to a fixed rate deal.


Find out more about SVR vs Fixed Rate mortgages at http://www.confused.com/mortgages

Three Solid Reasons For Home Refinancing

If you've been debating about whether or not home refinancing is the right choice for you, the best way to decide is by exploring a few of the best reasons available. Below are some of those reasons.

Reason #1 - Saving Money

Probably the best reason for home refinancing is to save money, but there are several ways to accomplish this effectively. First, you can simply get a new loan which has a lower interest rate and that translates into lower monthly payments. This can be a good choice if you took out a loan when rates were higher or when your credit score was lower.

Another way to save money is by extending the life of your loan. If you currently have a 15 year mortgage, you can cut your monthly payments drastically by doing your home refinancing with a 20 or 30 year loan. Of course, you will pay more in interest over the life of the loan but if you need those lower payments today, this is a good option.

Reason #2 - Accessing Equity

Another popular for home refinancing is to gain access to the equity in your home. Equity is the difference between what is owed on the home and its value. For example, if your home has been appraised at $250,000 and you have an outstanding mortgage for $175,000 on the home, then your equity is $75,000. By doing home refinancing, you can sometimes tap into that equity to help pay off bills, pay for your child's college, or do major home renovations that could increase the value of your home.

Basically, you'll be taking out a larger loan but if you've played your cards right, then the monthly payments should be more reasonable than taking out financing to cover those other expenses separately.

Reason #3 - Consolidating Debt

Many people choose to do some type of home refinancing when they have a great deal of excess, high-interest debt they need to get out from under. Generally, the interest rates for home loans are a great deal less than for personal loans and for credit card debt. If you want to cut your overall costs and improve your credit score quickly, taking out this loan and using the equity in your home to pay off some of these bills is a wise choice.

If you choose this option, you need to make sure you aren't going to make the cardinal mistake of running up all of that debt all over again. That usually leaves you with a higher monthly mortgage payment, as well as more of those bills. Plus, if you've succeeded in improving your credit picture, you could access even more credit which could deepen your troubles. Again, this is not a good idea.

Other Reasons

Besides the reasons listed above, people do home refinancing for a wide range of reasons. You need to decide if the choice is right for your finances before you make this commitment, however.

Don't jump into Home Refinancing without considering some of the best reasons to take that plunge. You can learn more about them at http://www.homemortgageloan-refinance.com/Bad-Credit-Home-Loan-Refinance.php.

Patriotic Refinancing

Offering a silver lining to the cloudy economy, President Obama encouraged Americans to take advantage of the lowest mortgage rates on record by refinancing their homes. According to the Associated Press, Obama said in a recent press conference, "The main message we want to send today is there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates."

With Americans who had recently refinanced their homes by his side, Obama encouraged homeowners across the nation to use the low mortgage rate to their advantage. "That is money in their pocket," he said of those homeowners who refinanced.

Thanks to efforts by the Federal Reserve, current rates on 30-year mortgages have fallen to 4.78 percent, the lowest on record. This means that rates are down by more than a full percentage point from just a year ago.

However, the president doesn't necessarily mean all homeowners. The president's Making Home Affordable program is geared to help borrowers whose loans are held by Fannie Mae or Freddie Mac refinance into a more affordable mortgage. It is also meant to help homeowners who are struggling to pay their mortgage after their interest rate has increased or they have less income. The government Web site makinghomeaffordable.gov offers all the details.

According to the Web site, the Obama administration considers stabilizing the housing market to be one of the key components to reviving the nation's struggling economy. The program is designed to pinpoint those Americans who are most likely headed to foreclosure despite having kept up their mortgage payments. The president stressed the importance of not only keeping Americans in their homes, but also giving them money to spend on something other than over inflated mortgage payments.

President Obama himself during the press conference, as well as the Making Home Affordable Web site, stressed the importance of watching out for refinancing scams. "If somebody is asking you for money up front before they help you with your refinancing," Obama said, "it's probably a scam." The Web site stressed the following:

* There is never a fee to get assistance or information about Making Home Affordable from your lender or a HUD-approved housing counselor.

* Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay - walk away!

* Beware of anyone who says they can "save" your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

* Never submit your mortgage payments to anyone other than your mortgage company without their approval.

"The Obama Administration has launched a coordinated effort across federal and state government and the private sector to target mortgage loan modification fraud and foreclosure rescue scams that threaten to hurt American homeowners and prevent them from getting the help they need during these challenging times."


Jill works on a website that has information on real estate in Fort Worth. It provides a free search of the Fort Worth MLS along with a real estate blog.

Mortgage Rates Hover Near All Time Lows

There was not much movement in most of the major mortgage products this week. The 30 year rate dropped from 4.86 to 4.82. This is only slightly above the 4.78 all time low that was reached a few weeks ago. The 15 year rate dropped from 4.52 to 4.50. There was some interesting movement with the 5 and 1 year arm. The 5 year arm dropped from 4.82 to 4.79. At the same time the 1 year arm rose from 4.71 to 4.82. This is the first time the 1 year arm has been above the 5 year arm. Regardless both rates are pointless because they are at or near the same rates for a 30 year arm; therefore there is no reason to get an arm instead of a 30 year mortgage in the current market. Below are mortgage rates for the last few weeks and from 6 months ago on November 20, 2008.

May 21, 2009

30-yr 4.82 15-yr 4.50 5-yr ARM 4.79 1-yr ARM 4.82

May 14, 2009

30-yr 4.86 15-yr 4.52 5-yr ARM 4.82 1-yr ARM 4.71

May 07, 2009

30-yr 4.84 15-yr 4.51 5-yr ARM 4.90 1-yr ARM 4.78

Apr 30, 2009

30-yr 4.78 15-yr 4.48 5-yr ARM 4.80 1-yr ARM 4.77

Nov 20, 2008

30-yr 6.04 15-yr 5.73 5-yr ARM 5.87 1-yr ARM 5.29

As we can see rates have not experienced much movement in the last month. They have continued to hover around all time lows for the month of May. They remain substantially lower than what we saw 6 months ago. In addition to rates we always like to look at actual mortgage payments. We took today's rates and translated them into a mortgage payment for a 200k mortgage. We did the same thing with rates from last week and rates from November 20, 2008.

May 21

30-yr $1051.74

15-yr $1529.98

5-yr ARM $1048.12

1-yr ARM $1051.74

May 14

30-yr $1056.59

15-yr $1532.03

5-yr ARM $1051.74

1-yr ARM $1038.47

Nov 20

30-yr $1204.24

15-yr $1658.67

5-yr ARM $1182.43

1-yr ARM $1109.36

A mortgage payment this week is slightly lower than what it would have been last month. This is nothing compared to the saving one would get compared to 6 months ago. For a 200k house a mortgage payment is $152.50 less a month now than it would have been on November 20, 2008 for a drop of 12.66%. This is often forgotten when the media talks about home prices being down 15% to 20%. After one factors in mortgage rates along with falling house prices the actual payments could be down over 30%.

So what do we expect to happen over the next few months? As long as the economy stays week mortgage rates will probably continue to hover around just under 5%. Once the economy starts to recover the general expectation is that rates should start to rise. It's hard to know how high mortgage rates will go once the economy recovers. Estimates have ranged from 10% to 18%. Most of this will depend on how quickly the economy recovers and if the FED moves quickly enough to changes policies from boosting the economy to slowing inflation.


Ki lives in Austin Texas. He website provides a free Austin home search. He also provides a mortgage calculator widget along with a few other mortgage widgets that show updated information on mortgage rates.

Home Mortgage Refinancing – How Rates and Terms Affect Overall Cost

When looking at home mortgage refinancing, rates and terms of the loan are critical. The rate is the amount of interest that you will be applied to the unpaid principal during each loan payment period, while the term is the length of time before the loan is paid off. It is important to understand how various combinations of these two factors affect the total cost of your loan. Make certain that you have a complete understanding of not only the monthly payment that will be your obligation, but the cost of the entire loan over the course of the loan.

Definitions

There are some common buzz words associated with obtaining home refinancing. It is important that you understand the meaning of the terms as the loan broker or the lender defines them. If the definition is not standard usage as you understand the term, you may find yourself with some very wrong assumptions about the mortgage documents that you signed. For example, you should at a minimum define adjustable rate mortgage, mortgage term, Option ARM and negative amortization. Be aware of alternative terms used in the documents and be certain that you understand the impact these words and clauses will have on the length and cost of the mortgage loan.

ARM

An adjustable rate mortgage grew in popularity during the 70s and 80s when fixed rate mortgages were climbing sky high. The adjustable rate mortgage allowed more home buyers to qualify for a loan, because the interest rate and thus the initial payment amount was lower. If you select the ARM for your home mortgage refinancing, you will typically pay less for 6 to 24 months after which your rate will increase at a rate tied to some outside index. There may or may not be a cap on how high the adjusted rate can go and how often it can be adjusted.

Fixed Rate

A fixed rate is quite common when searching for home mortgage refinancing. This type of rate benefits those who have a stable income, plan to stay in the same home for at least 3 years, and who need to be able to plan ahead for expenses in the foreseeable future. The fixed mortgage rate is set at the onset of the loan term and does not change during the term. It tends to be somewhat higher than an adjustable rate mortgage since the lender has a slightly higher risk of loss with this type of loan.

Negative Equity

Negative equity loans are more likely to be seen in new home mortgages than in home mortgage refinancing loans, since the concept is relatively new. Essentially, the negative amortization loan adds the unmet portion of interest and principal payments each month to the principal balance. This means that at the end of the grace period which can be only a few months, the borrower ends up owing more in principal than was on the original loan. A few individuals can take advantage of this type of loan but it requires self-discipline and an understanding of strict budgeting.

Guest Post by To get the latest, most accurate and complete information about Home Mortgage Refinancing or Home Mortgage, be sure to visit the web site located at http://www.homemortgageloan-refinance.com.