Mortgage Rates Hit All Time Lows
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The 30 year mortgage rate hit its all time low this week falling from 4.80 to 4.78. This matches the previous all time low that was reached just a few weeks ago on April 2, 2009. For the last month mortgage rates have been hovering a little below 5 percent. The 15 year fixed mortgage rate held steady for the second week at 4.48. While this is low for the 15 year rate the difference between the 30 year rate and the 15 year rate is lower than usual. Therefore, the 15 year rate should be seeing less activity than normal. The 5 and 1 year arm both dropped this week. Since they are currently the same as the 30 year rate they are seeing almost no activity. Below are mortgage rates for the major mortgage products for the last few weeks.
Apr 30, 2009
30-yr 4.78 15-yr 4.48 5-yr ARM 4.80 1-yr ARM 4.77
Apr 23, 2009
30-yr 4.80 15-yr 4.48 5-yr ARM 4.85 1-yr ARM 4.82
Apr 16, 2009
30-yr 4.82 15-yr 4.48 5-yr ARM 4.88 1-yr ARM 4.91
Apr 09, 2009
30-yr 4.87 15-yr 4.54 5-yr ARM 4.93 1-yr ARM 4.83
Apr 02, 2009
30-yr 4.78 15-yr 4.52 5-yr ARM 4.92 1-yr ARM 4.75
As we can see mortgage rates have been relatively stable for the last month. The 30 year rate has stayed within a range of .11 points. Moving forward its certainly possible rates could continue to hover in this range. The government is doing everything it can to keep rates low. Since rates are already at all time lows it's unlikely they have that much farther to fall. So we could continue to see rates hovering between 4.5 and 5.0 for the next month or so.
In addition to mortgage rates we like to look at actual mortgage payments. We translated today's rates in mortgage payments for a 200k house. We did the same thing with rates from April 23rd, 2009 and rates from 6 months ago on October 30th, 2008.
Apr 30
30-yr $1046.91
15-yr $1527.94
5-yr ARM $1049.33
1-yr ARM $1045.7
Apr 23
30-yr $1049.33
15-yr $1527.94
5-yr ARM $1055.38
1-yr ARM $1051.74
Oct 30
30-yr $1258.87
15-yr $1708.31
5-yr ARM $1245.77
1-yr ARM $1120.56
Since rates have been relatively stable recently we are not seeing much of a difference from last week. But if we look back 6 months ago we see substantial savings. For a 200k mortgage one would pay $211.96 less a month today for a drop of 16.83 percent. People often underestimate the importance of mortgage rates when buying a home. While a lot has been made of the fact that prices have fallen by 5 percent in some areas people have at times paid less attention to mortgage rates even though their drop has resulted in mortgage payments that are 15 percent lower.
So what is our advice to people looking for a home? First off talk to a bank or mortgage banker early on in the process of searching for a home. Banks are more stringent about giving out loans than they have been in the past. If you find a problem in your credit report early on in the process you have more time to fix it and still get a decent rate. Additionally, if you are denied by one bank you have time to search around for a lending institution that is more likely to give you a loan. Our other advice is to pay attention to mortgage rates over prices. While its unlikely prices will go up quickly in the next few months the same thing cannot be said about mortgage rates. Mortgage rates have fallen quickly in the last 6 months but they could rise just as quickly this summer.
Article Source: Articlelogy.com
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