Mortgage rate research website, BurlingtonMortgage.biz announced that mortgage rates posted on the site are up from the historical low points reached in previous weeks. On Friday, December 30th, 2011, 30 year fixed mortgage rates as low as 3.75% were displayed in the rate tables (APR: 3.864%, Points: 1, Lender: AuroraBank.) This is an increase over one week previous when 30 year rates hit a record low just before the Christmas holiday.
The rise in pricing was also reported by Freddie Mac, a government sponsored enterprise and purchaser of residential mortgages on the secondary market, in its weekly rate survey released Thursday, December 29th. Average pricing was up slightly for each product tracked in the survey.
There are going to be mini-fluctuations but rates can’t stay at the bottom forever.
We have discussed this previously on our blog, but a 1% increase in rates from 4% to 5% on a $400,000 home takes your payment up almost $250 per month and almost $90,000 more in interest over the course of a 30 year loan.
And that same home would have to drop nearly 20% (so from $400,000 to about $320,000)of its value to compensate for the 1% rate rise. And even though your monthly payment would be similar IF it dropped 20% you still pay more in interest.
And as much as some people speculate we haven’t seen the bottom of the housing market here in Santa Clarita, Its hard to imagine $400,000 homes falling down to $320,000 coming up in 2012. But even if that happened you would still make out in the long term by locking into these all-time-low rates.
If you have any questions please feel free to contact us.
Zach McReynolds 661.262.9224
Cherrie Brown 661.877.1929