Friday, June 30, 2006

Mortgage Rates Increase

Yesterday the FED increased overnight rates by another 1/4 point. However many lenders increased their rates a few days ago before the official FED notification..
In the last year as the FED has increased overnight rates; mortgage loan rates have increased in anticipation of upward rates then dipped a week or so after the rate increase. As the FED may be ready to stop rate increases for a bit you may see rates declining in two weeks by 1/8-1/4 of a point. They should be bouncing around between 6.75-7% for a 30 year fixed. This is still a bargain when compared to historic rates.

However if you have one of the interest only loans or a rate that was fixed for 3 years I would suggest you begin shopping fixed rate loans. It is posssible that your payment could almost double if you have an interest only loan. Also in this market selling is a slow process so if you find yourself having trouble with payments you may not be able to sell quickly.

Below are some rate averages across the nation. Rates will vary by location.

30-year fixed: 6.93% -- up from 6.83% last week (avg. points: 0.34)
15-year fixed: 6.57% -- up from 6.45% last week (avg. points: 0.31)
5/1 ARM: 6.59% -- up from 6.49% last week (avg. points: 0.3)

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