Mortgage Rates Up Overall in 2006

Well, Freddie Mac's most recent survey says that shorter term mortgage rates are just slightly lower -- but that doesn't take away the fact that since the beginning of 2006, rates are about a half a percentage point higher than they were. It's no surprise then that the chief economist at Freddie Mac is saying that the housing market is cooling.

This begs the question: to buy or not to buy? My wife and I found ourselves wrestling with this question, and with regards to a lovely home that we really liked. However, we did think it was overpriced. We also thought (and think) the market is overheated in our neck of the woods. In the end, we didn't buy -- at least in part because we thought we would be overstretching ourselves financially, and with the market conditions, the risk wasn't worth it.

Having said that, our new ARM mortgage will adjust soon. Unfortunately, it will mean higher interest rates for us on our current home. But the rates still aren't as high as if we'd taken a fixed rate mortgage at the time when we renegotiated. It's our only consolation -- that and the hope that the Feds are done with raising interest rates for awhile. Oh, and we've got great payment options, which allow us to put lump sums down on our mortgage whenever we want. We've been taking advantage of that, and I can tell you that it feels really good to see that balance on our mortgage going down MUCH more quickly.

We'll stay put in our current house, while the "storm" of market confusion continues. We'll renovate the basement to get some more space, and finally get some of those great closet organizers in place. That should help us make best use of our space, and keep us out of the market turmoil until we're ready to take the plunge. I figure when the new little one starts making waves for Number 1 son, we'll likely have to move in order to keep peace in the family.

Michael

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