For the second week in a row, American homeowners were faced with mixed blessings of good and bad news. On the one hand, for the third time in a row the Federal Reserve elected not to adjust short-term rates preferring to keep them steady. On the other hand, mortgage rates on home loans are not set directly indexed or influenced by the Fed, but are rather set by the market. According to Bankrate.com’s national survey of large lenders, this week has been another mixed blessing for American homeowners, with Atlanta mortgage rates showing slight rises for the second week in a row. Nonetheless, the news could have been much worse had the Fed elected to raise their rates.
Across the board slight rises in Atlanta mortgage rates saw 30-year fixed rate mortgage rates rise 2 basis points from last week’s 5.92% to this week’s 5.94%. 15-year fixed rate mortgage rates saw a slightly higher 3 basis point jump from last week’s 5.62% to this week’s 5.65%, and 5-year adjustable mortgage rates saw a similar 3 basis point jump from last week’s 5.64% to this week’s 5.67%. Overall, however, Bankrate.com’s national survey of mortgage lenders saw Atlanta mortgage rates holding steady and most economist and financial experts are not predicting any sort of panic on the horizon.
One growing trend, however, that does appear to be coming through is among those Atlanta homeowners who read more into the relationship between American home mortgage rates and the short-term lending rate set by the Fed and are starting to refinance out of short-term adjustable mortgage rates and are looking to lock their home mortgage loan payments in with the security of 30-year or 15-year fixed rate mortgages, just in case an unexpected rise in the Fed rate rebounds on short-term adjustable mortgage rates. Now is an excellent time to take the money you have saved over the past few years in that ARM and lock into a long term rate on a 30 year fixed mortgage.
Another growing refinancing trend slowly making its way through the American home loan market is among American homeowners who are deciding that now is not the right time to be moving to new properties and instead are electing to free-up some of the built up equity in their home to finance home improvement extensions. The added bonus being perceived here is that when the right time to sell does arrive, the home improvements will help to give that little extra boost in helping the home sale along. With many economist and financial experts predicting that both 30-year and 15-year fixed rate Atlanta mortgage rates unlikely to change much from where they are at the current moment, this could well be a very affordable way of making those home improvements you’ve always talked about but never really got around to doing.
Those with 5-year adjustable mortgage rates may well be wondering why they did not take what looks to have been attractive option of converting to a fixed rate mortgage in the last few months. With Bankrate.com’s national survey of large lenders showing an across the board increase in Atlanta mortgage rates this week, the 5-year adjustable mortgage rates took the biggest hit as they saw the interest rate being charged on their home loan jump a full four basis points from last week’s 5.60% to this week’s 5.64%. Conversely, both the 30-year fixed rate and 15-year fixed rate mortgage rates remained fairly constant, both of which moved north by one and two basis points respectively to stand this week at 5.92% and 5.62%, respectively.
Needless to say, many Atlanta homeowners may now be looking around to see how the experts see Atlanta mortgage rates going before deciding whether they should hold out and see if 5-year adjustable rate mortgage rates are just re-aligning themselves of if the cross the board rise in Atlanta mortgage rates in the last two week is signs of an ongoing trend.
If you think you may be paying too much in Private Mortgage Insurance (PMI), then the chances are you are. Most Atlanta mortgage insurance companies will consider a number of different factors before assessing your PMI premiums, but if you have a bad credit rating or are relying on a mortgage loan of more than 90%, then it’s almost certain you’re paying premium PMI rates. So, if you want to make sure you minimize these costs on your home mortgage loan, you have three options. You can put down 20% or you can do a piggyback loan. With a piggyback, instead of paying PMI, the lender who carries your second mortgage assumes the risk that would traditionally be taken on my the PMI company. Generally, you will see a savings if you choose a second mortgage over paying PMI, however, in the current rate environment, those savings are far less than they have been over the past few years. Alternatively, you could try to buy a home that is likely to increase in appreciation and then get your home appraised after you have been there two years. If the appreciation has been enough to push your loan to value (LTV) ratio below the magical 80% theshold, then you can get rid of that PMI payment.
Following several month’s of good news, American homeowners woke up to a bump this week as the expected backlash from recent falls in mortgage rates came through. According to Bankrate.com’s national survey of large lenders, Atlanta mortgage rates were all sharply up from the previous week. Week-on-week comparisons saw the 30-year fixed rate mortgage interest rate take the biggest hit, with a ten basis point upswing from 5.81% last week to today’s 5.91%. 15-year fixed rate mortgage interest rates did not fair much better, rising from 5.51% to 5.60% week-on-week.. The least affected Atlanta mortgage interest rate this week was the 5-year adjustable mortgage rate, which saw an eight basis point jump from 5.52% last week to this week’s 5.60%.
Given the recent run of good news, with across the board mortgage interest rates seeing steady declines over a 4-month period, most American homeowners will be hoping that this week’s movements are just a glitch and that the markets took the chance of a short working week to correct themselves slightly.
Fed officials announced a broadside to the financial markets that it would be unlikely that another interest rate cut will be announced in the near future and even went a step further by suggesting that if inflation was not under control in the next few months, a rate rise may be on. However, while the Fed had seen the US housing market as slowing down of late, the good news for American homeowners this week was that the Fed saw that in the short to medium term the US housing market would start to make a recovery. It’s likely, however, that any recovery in the US housing market will be strictly controlled so that it is gradual, which in the long-term should be more beneficial to American homeowners as long, gradual, sustained growth is generally better all round for US housing prices.
Atlanta homeowners and buyers will be happy that the expected back-lash from last week’s dramatic falls in mortgage interest rates did not materialize. Even better news was that not only did American mortgage rates not rebound last week, but that they either stayed steady or fell slightly. According to Bankrate.com’s national survey of large lenders, this week saw both 30-year and 15-year fixed rate mortgage stay steady at 5.80% and 5.50%, respectively. 5-year adjustable mortgage rates, on the other, managed a slight drop south of its impressive figure of last week with a one basis point drop from 5.52% to 5.51%.
With 15-year fixed term rates now fighting head-to-head with 5-year adjustable mortgage rates, American homeowners with 5-year adjustable mortgages must be thanking that they have ridden their luck and stayed the course through this latest round of reductions in American home mortgage rates. They must, however, also be wondering how much longer this can last and whether or not it could be conceivable the next week we will see a further drop in 5-year adjustable mortgage rates.
With the slight hiccup of one week, a prolonged fall in American home mortgage interest rates over the last quarter of the year must have many Americans wondering whether now is the right time to get out of renting and buy their own home. At the same time, they may feel if they wait that little bit longer they’ll be getting an even better deal than they can get now. With interest rates dropping and housing prices stabilizing, now is probably an excellent time to make that purchase. Just when the media makes the housing problems look the worst, that's probably when we are near the bottom on pricing. Perhaps thee will be a little further slide, but we should be turning the corner soon.
