Mortgage Rates Down Slightly

Freddie Mac and the Mortgage Bankers Association say that mortgages are down very slightly, since the last mortgage survey done by these two organizations.

I'm back to thinking that it might be a good time to buy, especially if you are interested in a resale home. The price pressure on resale properties appears to be greater than the price pressure on new homes -- after all, the new home builder can wait to sell if the price isn't right and the home isn't built yet. However, the person selling their own personal home may not be able to.

People getting or renegotiating mortgages right now seem to be steering away from ARMs, according to the Mortgage Bankers Association. Given an environment where interest rates are going up (and it appears that the rates will increase for some time yet, unless the US Fed makes a big change in policy), taking the best fixed rate can be the right move. After all, as my parents are always reminding me, the interest rates on mortgages are still at historic lows, compared to the inflation rampant 80's and early 90's.

Not to buck the trend, but we did negotiate in the fall, and went with a variable rate mortgage (which varies much more frequently than a traditional ARM) and we also got an "open" mortgage that we can dump cash on whenever we want. Frankly, while our rate of interest is going to slowly climb, I still think we are better off because we can pay this thing off faster! While you want to get a low interest rate, you don't want to be paying on a mortgage for 30 years if you don't have to.

Balance all the options, and be sure to keep in mind that the earlier you become mortgage free, the less you'll have spent on interest all around -- regardless of the rate you got.

Michael

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