Since the take-over of Fannie Mae and Freddie Mac by the federal government, the average mortgage interest rates have fallen sharply. This week was no exception, despite the fact that the Federal Reserve did not lower its interest rates in response to the current turmoil in the US financial markets. With that in mind, today 9/18/08 Freddie Mac reported that average mortgage interest rates have plunged to the lowest levels in 5 weeks. Nationally the average mortgage interest rate for 30 year fixed-rate mortgages was 5.78% (5.78% in the southeast), down from 5.93% a week ago. The average interest rate for 15 year fixed-rate mortgages was 5.35%, down from 5.54% last week. A year ago the 30 year rate was 6.34%. The last time we saw interest rates this low was February 14, 2008! How many of you will now take advantage of these very low interest rates and low home prices, and finally buy that new home? Bargains are out there for the taking, if you are willing to make a decision.
Lots of current homeowners are taking advantage of these low rates to refinance their homes changing from Adjustable Rate Mortgages (ARMs), never my favorites, to fixed-rate mortgage products. The Mortgage Bankers Association reports that in the first two weeks of this September 2008, 95% of mortgage applications were for fixed-rate loans. Lots of people got into trouble when their ARMs readjusted to higher interest rates and their monthly payment skyrocketed beyond levels they could handle. Not a surprise that those who have avoided problems so far are now changing to loans where they will know what the payment will be throughout the life of the mortgage. No surprises. If you currently have an ARM, you may want to speak with a good loan officer or mortgage broker to see if you can put yourself in a more secure position. With rates so low, now may be the time. Cannot hurt to ask.
If you want to learn more about Freddie Mac or see the details of their survey, go to: www.freddiemac.com and click on the link for "Current Weekly Survey". They break down the survey by specific regions in the United States so you can see how your state compares to other parts of the country. They also explain the mission of Freddie Mac and offer a lot of useful information for consumers.
If you would like to speak with a lender you can find some at my website: www.jelwell.century21bnr.com . You can also speak with your own bank, credit union, or mortgage broker to see what your particular interest rate would be, should you decide to finance a home purchase.
John Elwell - REALTOR
Bill Nye Realty, Inc.
Licensed in Florida