Historical Mortgage Rates: Mortgage Interest Rates Move Down Again But Still Relatively High
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Mortgage and refinance rates have been historically low in 2010. Interest rates were driven to record lows to help the housing market recover from one of the worst housing recessions on record. After the boom in home building and the price of homes sky-rocketing funded by excess capital and very lose lending standards prices have come back to historical norms.
The interest rate for which you ultimately qualify for your home loan is a big deal, indeed. Paying just a few extra points can mean thousands of dollars in additional payments. In fact, you could make the argument that shopping around for a mortgage loan with the lowest-possible rate is one of the best uses of your time in terms of being frugal with your money. Mortgage and refinance rates hit record lows in the fourth quarter of 2010 and have since headed higher. Late last year fixed conforming 30 year mortgage rates hit an all-time low of 4.23 percent. To give you some historical perspective on how low rates are back in the early 1980's fixed conforming 30 year mortgage rates were over 17 percent according to Freddie Mac.
Fixed-rate mortgage interest rates are determined by fluctuations in Treasury note yields, since these mortgages are seen as the second-safest investment next to these T-notes. Meanwhile, variable rate-mortgage interest rates are determined by something called the federal funds rate - which has to do with the amount that banks charge when lending each other money.
These days fixed conforming 30 refinancing and mortgage rates are around 5.00 percent. In last week's Primary Mortgage Market Survey Freddie Mac reported the average 30 year mortgage rate was exactly 5.00 percent. The future direction of mortgage rates and refinance rates will be higher in 2011 and 2012. As the economy improves, the unemployment rate goes lower and inflation heads higher the Fed will raise interest rates which will cause mortgage rates, savings account rates and CD rates to head higher.
There are a number of factors to consider when determining when is the best time to take out a mortgage. These include: the cost of your current mortgage or rent payments, how interest rates are "trending" in terms of historical rates, your ability to come up with a down payment, and your ability to make payments on your would-be new mortgage loan.
Article Source: Articlelogy.com
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