Mortgage rates dropped this week from 4.87 to 4.82. They did not drop below the all time low of 4.78 that they hit two weeks ago. For the last month, for the most part, we have not seen a lot of movement and instead have just seen the 30 year mortgage rate just bouncing around near all time lows.
The 15 year mortgage did reach new all time lows this week dropping from 4.54 to 4.48. The previous low was 4.52 that was reached last week. The 5 Year ARM dropped from 4.93 to 4.88. This was also a new all time low but since the 5 year ARM is still above the rate for the 30 year fixed the 5 Year ARM is seeing very little interest. The 1 Year ARM oddly hit the highest level we have seen in a month. The 1 year ARM is now the highest of the four major mortgage products. Below are mortgage rates for the major mortgage products for the last few weeks.
Apr 16, 2009
30-yr 4.82 15-yr 4.48 5-yr ARM 4.88 1-yr ARM 4.91
Apr 09, 2009
30-yr 4.87 15-yr 4.54 5-yr ARM 4.93 1-yr ARM 4.83
Apr 02, 2009
30-yr 4.78 15-yr 4.52 5-yr ARM 4.92 1-yr ARM 4.75
Mar 26, 2009
30-yr 4.85 15-yr 4.58 5-yr ARM 4.96 1-yr ARM 4.85
Mar 19, 2009
30-yr 4.98 15-yr 4.61 5-yr ARM 4.98 1-yr ARM 4.91
In addition to mortgage rates we also wanted to look at actual mortgage payments. We took a 200k mortgage and translated into what a mortgage payment would be based on today's rates. We did the same thing with rates from last week and rates from 6 months ago.
Apr 16
30-yr $1051.74
15-yr $1527.94
5-yr ARM $1059.02
1-yr ARM $1062.66
Apr 09
30-yr $1057.8
15-yr $1534.07
5-yr ARM $1065.1
1-yr ARM $1052.96
Oct 16
30-yr 1258.87
15-yr 1702.87
5-yr ARM 1217.16
1-yr ARM 1093.28
We have not seen much movement in the last week. But compared to 6 months ago a mortgage on a 200k house has come down $207.13 or 16.45 percent.
So what else are we seeing in the mortgage market? While mortgage rates are low banks are being more restrictive about who they give out loans to. Banks are looking for high credit scores. In addition, they are more stringent when they are appraising properties. So it's pretty difficult to get loans on rough properties even if they are relatively cheap.
So what is our advice? Even if you just bought in the last 6 months it might be a good idea to investigate refinancing. If you plan on buying in the next few months I would look into your credit score now so you have time to fix any problems that might show up on your credit report.
So what do we expect to see moving forward? While the economy remains down we expect rates to continue bouncing around a current levels. But once the economy recovers rates should move up, perhaps as high as 15 percent. So we might see the highest and lowest all time rates in a period of less than 3 years.
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