Mortgage_Interest_Rates

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					Mortgage Interest Rates

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503

Summary:
The New Year gives a lot of hope to those who are interested in applying
or refinancing a mortgage loan. With interest rates fallen on an average
by 0.8% from last year, this is the best opportunity to think about
mortgaging your house.

The comparative rate last year was 7%, which now has been reduced to 6.2-
6.5 %. A survey conducted in the second week of January shows that the
average interest rate for a 15-year fixed loan is 5.98% whereas that of
the 30-year jumbo loans...


Keywords:
mortgage,expenses,income,loan,rates


Article Body:
The New Year gives a lot of hope to those who are interested in applying
or refinancing a mortgage loan. With interest rates fallen on an average
by 0.8% from last year, this is the best opportunity to think about
mortgaging your house.

The comparative rate last year was 7%, which now has been reduced to 6.2-
6.5 %. A survey conducted in the second week of January shows that the
average interest rate for a 15-year fixed loan is 5.98% whereas that of
the 30-year jumbo loans is 6.47%. This indicates that there has been
little or no increase in the rates during the past one year, and it is
well below the average of the past twenty years, that is 8%. However, the
market experts predict a slight increase in the interest rates in the
current year. For a 30-year fixed rate loan, it is likely to reach about
6.7%.

The interest rate for the 30-year FRM has not been affected by the
Federal Reserve short-term interest rate. Over the past five years, the
interest rate for the 30-year FRM has remained below 6.5 percent. When
the Federal Reserve increased the interest rate in last June, the
mortgage rate had reached at 6.93%. But later in the meetings held by the
Federal rate-setting committee in August and later in September, October
and December it was decided that the rates would not be increased, paving
the way to the present scenario.

The adjustable rate loan rates also show a tendency to fall down. As is
seen from the comparison, the rates for the adjustable loans have also
fallen in the past one year, though not very significantly. For a 30-year
loan, with a fixed interest rate for one year, the average rate was 5.97%
in the second week of January, where as that for a fixed interest rate
period of five years was 6.17%.
There is an assumption that the Adjustable Rate Mortgage (ARM) rates are
going to be revised in 2007, and the monthly mortgage payments of ARM
borrowers are likely to increase. The households that can afford the
heavy monthly payments shall only opt for a fresh ARM. Having a
perception that the Federal Reserve will lower the short-term interest
rates in the future, adjustable rate mortgage may be a better option.
However, considering the upward trend of the interest rate of the short-
term loans, your mortgage debt may end up to be a nightmare for you.

In the present scenario, debtors are trying to get out of the ARM as much
as possible. This is the best time for refinancing your loan in order to
avail a better interest rate for a fixed-interest rate plan.

For those planning to buy a house, the interest rates may not be a prime
concern; to an extent, the market value of the property is the deciding
factor for them. But for those who think about refinancing the mortgage,
this may be a better chance, and keeping a close watch on the interest
rates will help them to pay off their mortgage loan in a smart way.