30-year Mortgage Rates highest in 15 months

irishgrl · #1 10-29-2005, 11:39 AM

Rates on 30-Year Mortgages Increase

By MARTIN CRUTSINGER, AP Economics Writer Thu Oct 27,12:14 PM ET

WASHINGTON - Rates on 30-year mortgages stayed above 6 percent for the third straight week, rising to the highest level in 15 months.

Mortgage giant Freddie Mac reported Thursday that the nationwide average for 30-year, fixed-rate mortgages rose this week to 6.15 percent, up from 6.10 percent last week and the highest level since 30-year mortgages were at 6.21 percent in late July 2004.

Rates on all other types of mortgages were up as well this week, reflecting growing nervousness in financial markets about inflation pressures, generated in part by the spike in energy prices in the wake of the lost production following the Gulf Coast hurricanes.

The nation's housing market has been booming this year with sales of both new and existing homes expected to set records for the fifth consecutive year. However, economists are forecasting that the sales pace will slow next year under the impact of higher mortgage rates.

The government reported Thursday that new home sales rose by 2.1 percent in September to a seasonally adjusted 1.22 million, but the median price of a new home fell by 5.7 percent to $215,700, indicating some cooling in demand.

"Although home sales were still impressive in September, mortgage applications in October seem to tapering off a bit, due in large part to slowing rising interest rates," said Frank Nothaft, chief economist for Freddie Mac.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.69 percent this week, up from 5.65 percent last week.

One-year adjustable rate mortgages rose to 4.91 percent. This was up from 4.89 percent last week and pushed the one-year ARM to its highest level since the week ending April 26, 2002.

Rates on five-year hybrid adjustable rate mortgages averaged 5.63 percent this week, up from 5.59 percent last week.

The nationwide averages for mortgage rates do not include add-on fees known as points. The 30-year and 15-year mortgages both carried a nationwide average fee of 0.5 point while the five-year ARM had an average fee of 0.6 point and the one-year ARM had an average fee of 0.7 point.

A year ago, 30-year mortgages averaged 5.64 percent, 15-year mortgages were at 5.01 percent and one-year ARMs averaged 3.96 percent. Freddie Mac does not have historical data on the five-year ARM which it began tracking this year.

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On the Net:

Freddie Mac: http://www.freddiemac.com

dissention · #2 10-29-2005, 12:22 PM

And you know what sucks? My mother bought her house with a loan from HUD. They are the devil.

irishgrl · #3 10-29-2005, 04:06 PM

Quote:

Originally Posted by dissention

And you know what sucks? My mother bought her house with a loan from HUD. They are the devil.

Whatever you do people DONT GET SUCKERED IN BY CREATIVE FINANCING!
it is EVIL! ARM's and the like sound really good but people dont take into consideration that rates will rise, and then they are stuck with a house they cant pay for. Some people buy a home thinking they will somehow make the balloon payment at the end of the term and guess what folks? it would take a miracle or incredible restraint (as in putting aside a certain amount every month on TOP of your monthly payment)

I myself got lucky, I got in two years ago, the rates were still reasonable and I got 30 year fixed, w/impound account so I dont have to come up with extra for taxes twice a year. you cant beat it. and I told my broker what my max monthly payment could be and he did it! so..........I predict a flurry of last minute buying.....or not

strandinthewind · #4 10-29-2005, 04:11 PM

Quote:

Originally Posted by irishgrl

Whatever you do people DONT GET SUCKERED IN BY CREATIVE FINANCING!
it is EVIL! ARM's and the like sound really good but people dont take into consideration that rates will rise, and then they are stuck with a house they cant pay for. Some people buy a home thinking they will somehow make the balloon payment at the end of the term and guess what folks? it would take a miracle or incredible restraint (as in putting aside a certain amount every month on TOP of your monthly payment)

I myself got lucky, I got in two years ago, the rates were still reasonable and I got 30 year fixed, w/impound account so I dont have to come up with extra for taxes twice a year. you cant beat it. and I told my broker what my max monthly payment could be and he did it! so..........I predict a flurry of last minute buying.....or not

Well, that is not exactly true. Many ARMS are fixed for a limited amount of time and have a cap. For the investor using OPM (other people's money) for the putchase price - they are a good idea because you can buy more on spec. at 4.91% than you can at 6.5% and you are going to sell the house in two years anyway if you are taking advantage of the no cap. gain tax per owner occupant of any profit under $250,000 after two years. Also, if the ARM goes to high, you can always refinance at a new ARM or fixed mortgage with a likely lower rate. To be sure, ARM's are not for everyone, but that are not de facto bad, which you prob. knew but I wanted to go on about it to show how smart I am

gldstwmn · #5 10-29-2005, 04:21 PM

Quote:

Originally Posted by irishgrl

Whatever you do people DONT GET SUCKERED IN BY CREATIVE FINANCING!
it is EVIL! ARM's and the like sound really good but people dont take into consideration that rates will rise, and then they are stuck with a house they cant pay for. Some people buy a home thinking they will somehow make the balloon payment at the end of the term and guess what folks? it would take a miracle or incredible restraint (as in putting aside a certain amount every month on TOP of your monthly payment)

I myself got lucky, I got in two years ago, the rates were still reasonable and I got 30 year fixed, w/impound account so I dont have to come up with extra for taxes twice a year. you cant beat it. and I told my broker what my max monthly payment could be and he did it! so..........I predict a flurry of last minute buying.....or not

All adjustable rate mortgages aren't bad. I don't like the negative am ones though.

gldstwmn · #6 10-29-2005, 04:22 PM

Quote:

Originally Posted by strandinthewind

Well, that is not exactly true. Many ARMS are fixed for a limited amount of time and have a cap. For the investor using OPM (other people's money) for the putchase price - they are a good idea because you can buy more on spec. at 4.91% than you can at 6.5% and you are going to sell the house in two years anyway if you are taking advantage of the no cap. gain tax per owner occupant of any profit under $250,000 after two years. Also, if the ARM goes to high, you can always refinance at a new ARM or fixed mortgage with a likely lower rate. To be sure, ARM's are not for everyone, but that are not de facto bad, which you prob. knew but I wanted to go on about it to show how smart I am

Weeee! You could be a mortgage broker.

strandinthewind · #7 10-29-2005, 04:22 PM

Quote:

Originally Posted by gldstwmn

. . . I don't like the negative am ones though.

I do not really understand those, though I know they will lose money, so you are paying it one way or the other

strandinthewind · #8 10-29-2005, 04:23 PM

Quote:

Originally Posted by gldstwmn

Weeee! You could be a mortgage broker.

I'd be seen throughout the nation with a sexy blond one

gldstwmn · #9 10-29-2005, 04:23 PM

Quote:

Originally Posted by strandinthewind

I do not really understand those, though I know they will lose money, so you are paying it one way or the other

You're bascially just deferring interest for 10-15 years, then you have to pay it back.

gldstwmn · #10 10-29-2005, 04:24 PM

Quote:

Originally Posted by strandinthewind

I'd be seen throughout the nation with a sexy blond one

Awww...

strandinthewind · #11 10-29-2005, 04:28 PM

Quote:

Originally Posted by gldstwmn

You're bascially just deferring interest for 10-15 years, then you have to pay it back.

EEK - is the rate better or worse. I mean if it is worse, why not just pay an extra $100 a month on your reg. mtg. and knock both down.

My FAV. BS mtg tool is when people like Ditech and others was the $500 + fee to allow you to pay bimonthly and "save" all that interest you originally were going to pay. I think that is a sham. I mean if you pay an extra 5-10% a month - you will save far more and save the $500 + fee. Or, just pay them bimonthly anyway with one full payment at the beginning so you are never in a 30 day default, if the contract allows that

irishgrl · #12 10-29-2005, 05:07 PM

Quote:

Originally Posted by strandinthewind

EEK - is the rate better or worse. I mean if it is worse, why not just pay an extra $100 a month on your reg. mtg. and knock both down.

My FAV. BS mtg tool is when people like Ditech and others was the $500 + fee to allow you to pay bimonthly and "save" all that interest you originally were going to pay. I think that is a sham. I mean if you pay an extra 5-10% a month - you will save far more and save the $500 + fee. Or, just pay them bimonthly anyway with one full payment at the beginning so you are never in a 30 day default, if the contract allows that

they sucker you into thinking that you will save so much by doing that but in reality you can do it yourself anyway, if you commit to it.....for example those months that have an extra pay period, if you just pay it on the mortgage, you will end up chopping quite a few years off of your mortgage, as long as there isnt a prepayment penalty...and besides, that fee they charge is bogus~

I personally dont care for anything thats adjustable if you are buying the home you plan on living in. ARM's might be fine for investors like you said, but for the average homeowner, they are tricky and a lot of people get a surprise when the rates go up. I personally cant see the point of selling a home in 3 or 5 years anyway, it doesnt give you much time to build much equity and you are gambling that your value will appreciate enough to pay of the balance and still make a profit.....just doesnt seem sound to me.

I aint moving from my little place, its not much but the way things are costing and the way the economy is tanking (job wise) it just doesnt seem smart. Im not an investor so I cant speak with the same authority as gldstwmn but Ive got a good healthy distrust of any type of creative financing, in the end, it mostly benefits the banks and that chaps my hide.

sara1998 · #13 10-29-2005, 05:38 PM

I wouldn't do an ARM for nothing. It would confuse the hell out of me. I'll stick with my conventional loan, thank you! At least then, I know what the hell is going on with it!

goldie · #14 10-29-2005, 08:06 PM

I'm going to brag ... I got my fixed rate mtg back in June 2003, when rates were at their lowest EVER. We couldn't have timed it better and we didn't even time it. It just happened. Suffice to say, I am NEVER leaving this house.

gldstwmn · #15 10-30-2005, 02:56 AM

Quote:

Originally Posted by goldie

I'm going to brag ... I got my fixed rate mtg back in June 2003, when rates were at their lowest EVER. We couldn't have timed it better and we didn't even time it. It just happened. Suffice to say, I am NEVER leaving this house.

What did you get? 4.75%? I actually saw them go that low around that time.