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Mortgage Rates Skyrocket
| In addition to rates we like to look at mortgage payments. Using a mortgage calculator we took rates from this week and translated them into a mortgage payment for a 200k loan. We also did the same thing with rates from June 4th, May 28th and from December 11, 2008 (6 months ago) Jun 11 30-yr $1146.89 15-yr $1587.84 5-yr ARM $1094.51 1-yr ARM $1078.53 Jun 04 30-yr $1109.36 15-yr $1559.79 5-yr ARM $1055.38 1-yr ARM $1050.53 May 28 30-yr $1062.66 15-yr $1533.05 5-yr ARM $1051.74 1-yr ARM $1036.07 Dec 11 30-yr $1131.81 15-yr $1602.5 5-yr ARM $1176.05 1-yr ARM $1084.67 So as we can see mortgage payments have jumped drastically. Compared to 2 weeks ago the mortgage for a 200k loan has increased by $84.23 or 7.3 percent. One point is that although rates have jumped rapidly historically speaking rates are still very low. So what do we expect moving forward? There is some speculation that rates will fall after the recent rise. I am not sure if this will happen or not there are some powerful forces moving mortgage rates. And regardless of what happens in the next few weeks with the massive government borrowing its expected that in 6 months rates will be significantly higher than what we are seeing today. So what is our advice to people looking for a home? First of all I would lock in immediately. While rates might go down there is a significant chance will continue to rise. If rates fall you can always relock at the lower rate. Additionally, I would avoid arms. Although the difference between 30 year rates and arm's has increased I would expect rates to be much higher in a year. |
About the Author
Ki lives in Austin Texas. His website provides information on Austin Texas real estate. It also provides a mortgage widget and a free mortgage calculator.
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