For one thing, interest rates are low, just below 6% for a 30-year fixed mortgage.
According to Freddie Mac, thirty year fixed mortgage rates now sit at 3.35%, a historical low.
The classic 30-year fixed mortgage demands interest of 6.5% these days, up from 5.8% three years ago.
Given that 15-and 30-year fixed mortgage rates are at a historic low, why even consider an ARM?
Speaking of interest rates, the average 30-year fixed mortgage is back under 6% by a comfortable margin.
Lending Tree is offering 5% for a 30-year fixed mortgage and 4.5% for a 15-year fixed mortgage.
The average rate on the 15-year fixed mortgage increased last week to 2.76 percent from 2.72 percent last week.
The national rate for a 30-year fixed mortgage in Zillow Mortgage Marketplace is now down 80 basis points from two weeks ago.
Mortgage rates have climbed--the average rate for a 30-year fixed mortgage was 6.33% last week, according to the Mortgage Bankers Association of America .
Wells Fargo ( WFC - news - people ) has a 5.25% 30-year fixed mortgage and a 4.75% 15-year fixed mortgage.
Average fixed mortgage rates in the U.S. over the past week finished the year near all-time lows, with the 30-year home loan at 3.95%.
JPMorgan Chase ( JPM - news - people ) is offering a 5.25% 30-year fixed mortgage as well as a 4.5% 15-year fixed mortgage.
The biggest savings come if you pay off the loan within the five to seven years before the ARM adjusts--effectively turning it into a very short, very low-rate fixed mortgage.
Average fixed mortgage rates in the U.S. over the past week kicked off the new year at or near record lows, according to Freddie Mac's weekly survey of mortgage rates.
You could, instead, get a 30-year fixed mortgage for 5.9% (reduced after tax to 3.5%) and buy a portfolio of 30-year munis yielding 4.7%, which would give you a spread of 120 basis points.
The average rate on the 30-year fixed mortgage, which is closely tied to yields on the 10-year Treasury, rose to 3.9% on Tuesday, the highest level in a year, according to HSH.com, a financial publisher.
Citigroup ( C - news - people ), is offering 5.375% or 5.25% for a 30-year fixed mortgage as well as 4.75% or 4.625% on a 15-year fixed mortgage depending on assumptions and assuming that the person has a good credit score.
One of the things we've noticed is that with interest rates down below 5 percent for a 30-year fixed mortgage, if you put 20 percent down on your house, what you're finding is that people are buying some of these foreclosed and distressed homes and that is helping the market out.
Hoffman expects the 15-year fixed rate mortgage to eventually drop to 2.75%, as well.
He says the spread between the 10-year Treasury note and the 30-year fixed rate mortgage has been unusually high.
Conversely, a fixed rate mortgage could be appropriate if you planned to keep home for a significant period of time.
In 1990, the average 30-year fixed rate mortgage was more than 10% but mortgage interest payments were only 4.3 percent of expenditures.
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By 2010, the average 30-year fixed rate mortgage fell to 4.69 percent, but the share of mortgage interest crept up to 6.3%.
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First, for people looking to get a traditional 30-year fixed rate mortgage, those rates aren't likely to move much in response to the Fed.
The Freddie Mac 30-Year fixed rate mortgage rose to 3.59% last week from 3.55% after setting a record low at 3.49% two weeks ago.
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Savings and loan institutions, recent victims of the flat yield curve with huge redemptions in outstanding fixed-mortgage paper, will be able to operate at wider spreads.
With bond yields rising since the Fed announced QE2, 30-year fixed rate mortgage interest rates went up to their highest level since the week of September 30 to 4.46%.
Under the first phase of Ohio's program, borrowers will meet certain income guidelines will be able to ditch their adjustable rate mortgages or other high interest rate loans and get into a 6.75 percent fixed rate mortgage.
Earlier this week, the Council of Mortgage Lenders said the main effect of FLS so far was to make fixed-rate mortgage deals, which account for about two-thirds of all new mortgage borrowing, a bit cheaper than before.
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