Mortgage Update 8/26/09 ARM’s are BACK!
while rates continue to edge down on FIXED rate mortgages, some investors are showing aggressive pricing on Adjustable Rate Mortgages (ARMs).
3/1, 5/1, 7/1 and 10/1 ARM’s have been priced about the same for a year, all no better than 30 year fixed, so there was no reason to take an ARM. NOW, it’s worth a look. It’s more likely to get to mid 4’s with a point on a 5/1 or 7/1 ARM than it will be any time soon on a 30 year fixed. AND, take it from one WHO KNOWS and HAS HAD a 3/1 ARM for SIX YEARS, there is nothing to be afraid of! My current rate is 3.375!!!
That’s the story on mortgage rates in Ephrata, Lancaster and beyond for 8/26/09!
Mortgage Update 8/12/09 Is The Party Finally Ending?
The FOMC, Federal Open Market Committee, agreed to keep short term interest rates unchanged. This is not what affects long term rates, like mortgages however.
The Fed has artificially driven mortgage rates lower by spending a trillion of their own dollars to buy Treasury notes over the last 9 months. They anticipate pulling away from this policy by October.
The stock market is reacting positively to this news, as it is a sign of confidence in overall economic recovery. Couple this with a rise in international sentiment that we are exiting global recession, and you have a market ripe for increase in mortgage rates.
There’s been multiple hikes in mortgage rates today already. Something in the 4’s will soon be out of reach on 30 year loans, even with 3 points. Zero points will soon near 6.0, FHA is alread there and 6.5 is around the corner.
Historically, rates are terrific, BUT we’ve lost our long-term memory and adopted a “what have you done lately for me” attitude. Rates in the 6’s will be a big boulder in the road to full blown economic recovery. Then what? Who knows!
That’s the story for those in the market for for mortgage in Ephrata, PA, Lancaster County and most of the USA. Brother Weems reporting!
Mortgage Update 8/10/09 Treading Water
Little change in interest rates from the end of last week. See the post for the week of 8/3.
Wednesday we’ll hear about the Fed’s plan for short term interest rates. Most think they will not make any changes, as we have seen some signs of recovery. As we see further growth, short term rates will rise. If stock market investors welcome that scenario, then mortgage rates will rise too.
Mortgage Re-Cap 8/3 – 8/7
A pretty good week for the nation’s economy as a whole meant bad news for mortgage rates. Existing home sales are up, unemployment is down and Cash For Clunkers jump starting the auto industry are all things pointing to putting the recession in the rear view mirror. I don’t believe it, but it is what it is.
30 year fixed conventional rates are up a quarter from the last week in July. It’ll take a full 3 points to get in the 4’s. No points is looking like upper 5’s. 6.0 seems to be the going rate on government loans.
I think rates will fall back in the next 2 weeks, I’m just not feeling the vibe of economic recovery. We’ll see. For a mortgage in Ephrata and anywhere in Lancaster County, be sure to check in with ol’ Brother Weems at Beacon Mortgage in Ephrata.
Mortgage Update 7/28/09
Rates look great, and so do I! (not)
Mortgage Update 7/23/09 The Thumbs Have It!
A video update, whattya think?
Mortgage Update 7/21/09 Fed to Keep Rates Low?
Mortgage rates are largely determined by the free market system. If people feel better investing in bonds and mortgage backed securities, rates are low. If folks are buying more stocks, hoping for a greater return, rates will be higher.
What’s different about this year is the Fed has invested in it’s own stuff, treasuries, to arbitrarily keep rates low to spur people on to buy homes, refinanance to free up cash flow to re-circulate in the economy and so on. Fed head Ben Bernanke says he plans to keep short term interest rates low for the near future, until unemployment figures drop and the economy as a whole shows more long-term stability.
This is, of course, good news and the market reflects a small dip in pricing today, maybe an 1/8th better than yesterday. See previous posts for more details, whether you have a mortgage need in Ephrata, Pa or elsewhere.