CassieNet News :: Mortgage Know-How :: RE: Mortgage rates finally stop rising !!!!

Mortgage Know-How :: RE: Mortgage rates finally stop rising !!!!

Author: Caron
Subject: Mortgage rates finally decline
Posted: Mon Nov 28, 2005 8:17 pm (GMT -8)
Topic Replies: 5

The 30 year fixed rate mortgages fell for the first time since the month of August. Throughout the past 11 weeks, they have either increased or remained almost unchanged. The prevailing economic scenario and a slowdown in housing rates are the possible reasons behind the fall in rates.

The 30 year fixed rate mortgages reduced 10 basis points to 6.32% (1 basis point = 1 percentage point). Unlike the 30 year mortgages, 15 year fixed rate mortgages reduced by 11 basis points to 5.88%. The 5/1 adjustable rate mortgages fell 8 basis points to 5.85%. The mortgages this week had a total of 0.35 points including both discount and origination points.

Since the disaster caused by the Katrina, interest rates and costs have been rising making homes less affordable as a result of which the housing market have experienced a downfall. Since the past 2 months, the housing market has slowed down to 2.01 million from 2.13 million, that is, it has experienced a reduction of 2.3%. Experts believe that lower oil prices have alleviated the possibility of inflation in the market. This has further helped in the reduction of interest rates since the last week.

Although the rates have reduced, the last week's refinance index fell down 6.9%. This indicates that more and more borrowers have refinanced when rates have increased from 6.24% to 6.42% than when rates have reduced significantly. However, the fall in rates will be helpful to borrowers who could not lock in their rates in the previous month due to the prevailing high rates. Such borrowers having fixed rate mortgages can at least lock in at comparatively lower rates. This will prevent them from making higher interest payments even if rates increase further in future.

For the full story see:
http://www.mortgagefit.com/discuss/rate-news.html
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