Will Rates continue to be low, low, low?
The Federal Reserve is spending billions per month to purchase mortgage-backed securities ($45 billion) and U.S. Treasuries ($40 billion), thus holding down interest rates for both. This program cannot continue and the stock market is all ready reacting (lower values) to a anticipated reduction in purchases by year end.
Mortgage rates in 2012 reached their lowest levels in 65 years. Last Fall you could refinance a home at roughly 3.4 percent. In comparison, says Standard & Poors, the average mortgage rate over the past 40 years has been 8.6 percent. Rates at this writing are approximately in the 4.6 percent zone. This Spring I refinanced my home at 3.5% on a 15 year loan, slightly less than you can do now.
What current rates are doing: FHA and VA are the lowest in the 4.25% range for a 30 year mortgage. Most 30 year conventional loans are in the 4.4% to 4.875% range with 4.625 being the most common.
15 year mortgages are in the 3.5% to 3.9% range with 3.75% being the most common.
A $200,000 loan at 4.5% on a 30 year mortgage would have a $1.014 P&I payment. At 6% it would be $1,199.
Rates will rise. It appears prices are starting to rise too so the longer you wait to refinance or buy a home the much higher your payments will be.
Thinking about buying or selling real estate? Give me a call at 918-218-6011. If you area out of my area I will refer you to a quality agent that can take care of your real estate needs.
Wayne "SHORTY" Short