Fixed Mortgage Rates Down, ARM’s Up

Now would be a good time to seal that loan when it comes to getting a fixed mortgage. The average rate for 30 year fixed mortgage and refinance rates are down at 4.77%, comparing to last week’s 4.81%. 15 year mortgages are averaging this week at 4.08%, down from last week’s 4.11%.

30 year jumbo rates are going low at 5.29%, with last week at 5.35%. 15 year jumbo rates are averaging at 4.71%, .07 points down from the prior week’s average of 4.78%.

If fixed mortgage rate borrowers are rejoicing at the drop of rates, those who already have an adjustable rate mortgage can’t say the same.

Current refinancing and mortgage rate on 1 year ARM’s are at an average of 3.14 %, just a tiny bit higher from last week’s rate of 3.13%.

3 year ARM’s are experiencing a higher jump, going at 3.47%, compared to last week’s 3.37%.

5 year ARM’s are now at 3.18%, the only ARM rate that’s down this week, compared to last week’s 3.24%. 10 year ARM’s are also going down with 4.18%, with the previous week at 4.22%.

Interest only adjustable mortgage loan rates trend is variable with the loan term. 3 year interest only rates are up from 3.51% to 3.57% this week, while 5 year interest only ARM’s are significantly down from 3.48% to 3.29%. 7 year interest only ARM’s are also down from 3.95% to 3.75% this week.

Fixed rate mortgages are good to go this week with a consistent drop in rates. ARM’s and interest only ARM’s are seeing a peak with short term mortgages such as 1-3 year loans, whereas longer terms are seeing a drop in rates.


Does the Interest-Only Mortgage Sound Too Good To Be True? – Maybe It Is

In this day and age, getting a loan is as normal as buying a refrigerator for your kitchen. Everybody has one.

Loans have become a necessity. Without them, we won’t be able to buy our dream house, get that ideal car, or move in to that bigger apartment. We try to keep our credit record clean so we can get a lower interest rate for our mortgage. And when we see an offer that says “interest-only” or “no down payment required” it’s as if we’ve died and gone to heaven. But are these mortgages really as good as they sound? Or are we in for a financial ride?

An interest-only mortgage is a way to borrow money, and pay less on a monthly basis. It may sound like a good deal, pay only the interest now (resulting in a lower monthly payment) then pay the rest of the balance later when your financial situation improves. The problem is, you may be taking on a loan that is more than your bank account can bear, and you might find yourself in a rough spot in the future.

So what happens with an interest-only mortgage? First, interest-only is not the loan itself, but it is an option that can be attached to a home mortgage. Here, a borrower only pays the interest on the principal for a set period of time. When you’re paying only for the interest, your initial monthly amortization may appear to be quite low. However, since you have not contributed any amount to your principle, the borrower is not building any equity.

Interest-only loans can be dangerous for people who cannot really afford an increase in monthly payments. Although it may sound promising to start a loan on low monthly amortizations, the balance will eventually increase as time passes. The people who are expecting an increase in salary in the future may feel confident at present, but when things don’t go as planned, this mortgage may turn from being a dream to a nightmare.

Interest-only mortgages although dangerous for the average person, are still good for savvy investors who clearly know what they are up against. People who plan to flip their homes or refinance before the interest-only period is over, may also benefit from this kind of option to a loan.

When considering loan types, interest rates, and mortgages, it is best to do a thorough review on what the mortgage really means for you now, and in the future. This will allow you to save thousands of dollars, and it won’t leave you with a loan that’s too much for your checking account.