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Interest rates remain favorable By Melissa Wirkus

Buying a home and financing it with a mortgage can be one of the biggest financial commitments you make in your lifetime.
There is a lot of thought and preparation that goes into taking out a mortgage loan.
Not only do you have to decide how big of a loan you want to take out, you also have to look into getting the most favorable interest rate as possible.
This involves a lot of shopping around for the best loan program for your specific situation as well as knowledge of the current market’s status.
As of right now, interest rates are not rising. Combine this with the fact that most of the local real estate markets favor buyers, and we see a very favorable time to buy a home and take out a mortgage.
A February 5, 2007 article from interest.com, “Rates remain below 6.5% for most home loans,” discusses the current state of the mortgage market right now, and why things are looking favorable for potential home buyers.
The thing with interest rates is that they are very unpredictable, and while the overall health and status of our economy can give us a little insight into where they are heading, we can never know their direction for sure in advance.
But as of right now, things seem to be looking good for mortgage interest rates, which is always important for homebuyers and existing homeowners because lower interest rates equal lower monthly payments.
“Affordable mortgages are turning the winter into a good time to buy or refinance a home. Over the past six months rates have moved up a little, then down a little, but the average cost of a 30-year fixed-rate loan has remained below 6.5 % since mid-August. As a result mortgages costs a bit more than last February but considerably less than last spring when rates were climbing towards a peak of nearly 7% in late June.”
Although as stated before, we can never really predict for sure where rates are headed; mortgage officials, companies and other industry insiders always like to give their opinions and predictions on where they see rates headed in the near future.
“Freddie Mac -- the government-chartered company that buys, packages and then resells mortgages to investors – anticipates the average 30-year fixed rate loan will continue to cost less than 6.5% throughout 2007. The National Association of Realtors is only a little less optimistic, projecting rates will increase to 6.7% by the end of the year.”
Although we would like to see rates as low as they were four years ago, during the peak of the housing boom, anything is better than the inflated rates we saw throughout the 80s and 90s.
When compared to the rates we saw last year, most types of loans are only seeing a very minute increase.
“30-year fixed-rate loan – the most popular way to pay for a house -- costs 6.42%, about a tenth-of-a-point more than in February 2006. 15-year fixed-rate loan costs 6.19%, about three-tenths-of-a-point more than this time last year. 30-year jumbo loans (for more than $417,000) costs 6.63%, about a tenth-of-a-point more than we were paying at the start of 2006.”
As for adjustable-rate mortgages, most of them remain about a half a point higher than we saw last year.

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