Mortgage rates in the U.S. have fallen to another record low as the week closes. It has declined for the 10th consecutive week this time.
As Freddie Mac reported this Thursday 30-year fixed 5% Mortgage Rates yields have averaged about 5.01% for the week ending on January 8th, 2009. it is a 9 basis point decline from last week’s rate. It is nice to compare it with the rates this time last year. which were 5.87%.
Mortgage rates in the U.S. have fallen to another record low as the week closes. It has declined for the 10th consecutive week this time.
As Freddie Mac reported this Thursday 30-year fixed rate mortgage yields have averaged about 5.01% for the week ending on January 8th, 2009. it is a 9 basis point decline from last week’s rate. It is nice to compare it with the rates this time last year. which were 5.87%.
homeowners should plan to refinance their home loans not for the greed of saving money on mortgage payments but with the fear of any future increase in adjustable rates for home equity loans.
Not everyone will be able to benefit from this historic time in the history of home finance. The reality is quite harsh. The US Credit Crisis and housing crunch have left many families and homeowners with damaged credit scores. Most of them owe more than their house’s worth. So it will be very difficult for most of the population to access the lower rates unless they have a good credit rating.
Is Fixed-Rate Mortgage Right For You?
Consider a fixed-rate mortgage if you prefer stability and wish to avoid the risk of increasing interest rates, especially if you have a large mortgage where even a slight rate hike could result in a significant rise in your monthly payment. It’s the ideal choice for those who prioritize caution and seek a risk-free mortgage solution.
Advantages of Fixed-Rate Mortgage
The obvious advantage is that the interest rate does not change – and neither will the amount of your monthly payment. You always know exactly how much you will be paying each week and can thus budget more accurately; the amount of your monthly payment will only increase if the amount of insurance rates or the amount of property taxes increase. Some borrowers consider it easier to plan for other big expenses, such as college funds and retirement, with a fixed-rate mortgage.
Disadvantages of Fixed-Rate Mortgage
The biggest disadvantage of a fixed 5% Mortgage Rates mortgage is that you run the risk of missing lower payments when the interest rate goes down. The difference in the amount that you pay each month can be substantial if you have an adjustable-rate mortgage and the interest rate is lowered. This not only saves you money each month but also potentially helps you pay off your mortgage sooner. Of course, nobody can ever accurately predict when interest rates are going to drop, although it is sometimes possible to have some indication and base your decision upon that.
Long-Term5% Mortgage Rates Falls Again
Long-term home 5% Mortgage Rates mortgage rates dropped again this week, with the 30-year fixed-rate mortgage hitting a fourth consecutive low in the history of Freddie Mac’s weekly survey.
The 30-year mortgage averaged 5.01% for the week ended Jan. 8, down from last week’s 5.10%. The mortgage averaged 5.87% a year ago.
The rate hasn’t been lower since Freddie Mac’s survey began in 1971. The survey covers conventional, conforming mortgages.
Average 5% Mortgage Rates, Lowest in Decades
The 5% Mortgage Rates Bankers Association said its refinance index, which measures refinancing activity weekly, stood at 5,904.5 as of Jan. 2, up from 1,254 on Nov. 21, before the Fed’s announcement. During the same time period, its purchase index rose to 344.2, from 261.6.
The survey does not measure how many of those applications become loans.
“Refinance activity continues to be strong, but purchase inquiries are relatively static,” said Cameron Findlay, chief economist at LendingTree.
Of course, buying a home is a more lengthy process than simply calling up a mortgage broker to refinance, and activity typically slows during the holiday season. However many home buyers are discouraged from jumping into the housing market given the increasingly dismal economic outlook.
Meanwhile, to qualify for the best rates, consumers still face stiff requirements. Borrowers need a credit score of about 720, along with 10 to 20 percent of equity in their homes. And many homeowners need to sell their existing properties to consider a new one.
