Mortgage Rates Bounce Off All-Time Lows; The Start Of A Trend?

By
Mortgage and Lending with Platinum Funding Group, Inc.NMLS-243033 NMLS 4195

 

Freddie Mac Weekly Rates

Low mortgage rates are terrific — if you can get them.

One week after posting its lowest mortgage rate in 50 years, Freddie Mac reports that the 30-year fixed rate mortgage rose by an average of 7 basis points nationwide this week to 4.22%. To get the rate, you’ll pay an average of 0.7 “points”.

This week’s rise in the 30-year fixed rate mortgage pulled rates off their all-time lows so either you locked last week’s rock-bottom rates, or you missed it.

Mortgage rates are rising.

As a refinancing homeowner or home buyer in Irvine , rising mortgage rates are something to watch. This is because, as mortgage rates rise, so do the long-term interest costs of giving a mortgage, increasing your homeownership costs.

For example, if you failed to lock a rate last week when rates were bottomed, and then decided to lock-in only after rates had climbed 0.25 percent, at the new, higher rate, over the life of your loan, you would have responsibility for an extra $5,300 in interest costs for every $100,000 you borrowed.

Rising mortgage rates can be expensive.

For home buyers, rising mortgage rates pose a second problem — they erode your purchasing power. A home that fits your budget at today’s rates may not fit your budget at next week’s rates. And because mortgage rates change quickly, you can sometimes feel ilke you’re racing the clock.

The hard part about mortgage rates, though, is that we can never know what they’ll do next. On some days they rise, on some days they fall, and on some days they stay the same. Instead of trying to “time the bottom”, therefore, a good strategy can be to lock the first, low rate that fits your budget. Then, if rates are lower in the future, you can look to refinance at that time.

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Tags:
mortgage economy
mortgage interest rates
mortgage loan rates
mortgage market
mortgage loan
real estate financing
refinance

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Rainmaker
670,524
Elite Home Sales Team
A Tenacious and Skilled Real Estate Team
Keller Williams Realty

That is a large bounce I hope it is not a trend.  We will have to see.

August 27, 2011 02:30 AM
Rainer
59,049
Kym Wright
Prudential California Realty

As much as I hate to see the bounce, sometimes it does shake the people that are "on the fence" off!  It takes these market fluctuations to get them to get serious.  I hope though it is not a long term trend.  It is hard enough to get clients to qualify!

August 27, 2011 02:33 AM
Rainmaker
169,669
James Muhammad
Keller Williams Realty

We need rates to stay as low as possible.  The article is great information and we will see how it goes.

August 27, 2011 02:34 AM
Rainmaker
144,603
JodiAnn Garone
You'll feel right at home with me!
Cataneo & Associates

Tiffany,

What a fantasic post to share, Thank you.... this is exactly what I have been expressing to my buyer clients for some time now. Sitting around waiting for price to drop even lower then what the current market value can sometimes cost you. Let's hope that more buyers realize that now is the time to buy :)  Have a great day!

August 27, 2011 04:53 AM
Anonymous #5
Anonymous
David

Great analysis.  In mid-March you would have written the same words and would have been incorrect.  The trend is your friend as those who follow the markets for years like to say, and an uptick in an otherwise obvious downtrend in interest rates (see your graph), would indicate that mortgage rates have further to fall.  Taking advice from someone who makes a living selling mortgages is like taking advice from a car dealership as to whether or not you should buy one of their cars.


Time will tell who is correct.

August 27, 2011 10:40 PM
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Rainmaker
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Tiffany Taylor

Platinum Funding Group
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