4.25% 30 Year Fixed Rate
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Program Rate APR
30-Yr fixed 4.750 % 0.7 to 1
15-Yr fixed 3.750 % 0.7 to 1
5/1 ARM 3.125 % 0.7 to 1
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Interested Parties Must Heed the Message of Current Rates

Per all reliable sources, current mortgage interest rates have been steadily rising of late. Following are specific national averages as of November 29, 2011:

Product Rate Last week

30 yr fixed mtg 4.04% 4.02%
15 yr fixed mtg 3.40% 3.37%
5/1 ARM 3.00% 2.99%
30 yr fixed mtg refinance 4.13% 4.10%

Deep-seated dynamics of current mortgage interest rates

Endemic economic hardship has recently sparked a foreclosure frenzy. Having been badly bitten once, lenders are twice as leery of potential losses looming throughout future financial horizons. Their heightened awareness of associated lending risks has induced correspondingly higher borrowing costs. Mortgage defaults cost lenders dearly. As businesses, lenders must generate sufficient income to absorb inevitable losses while retaining an adequate residual profit. As interest is their main income source, higher perceived risks are a chief cause of higher current mortgage rates.

Handwriting on the Wall

Per National Association of Realtors (“NAR”) data, first-quarter 2011 median US home prices were 4.6 percent lower than 2010 figures. Mortgage lending giant Fannie Mae recently projected further US home value decreases for the next few months. Most economists overwhelmingly concur that our nation’s battered realty landscape will not begin recovering until 2014 – at the soonest.

A persuasive case for promptness

Many would-be homeowners have hitched their wagon to a falling star by delaying their big purchase until home prices “bottom out.” Their underlying rationale is that sustained patience yields lowest prices.

Rapidly increasing current mortgage rates constitute the fatal flaw of this reasoning fatal flaw, however. A $200,000 30-year mortgage at today’s average current mortgage interest rates of 4.04 percent costs $860.72 per month to maintain. A loan of only $180,000 at tomorrow’s probable rate of 6 percent will take a monthly bite of $1,079.19 – provided the buyer’s income is sufficient to qualify for the “privilege.”

This comparison does not even broach the lost equity buildup and tax savings during a multi-year wait for the “brighter day” of decreased home prices. Current homeowners seeking asylum from oppressive budgetary constraints are well advised to affect the swiftest possible escape.

Prudent buyers must fully comprehend and quickly heed the clear message of the present market: Make hay while the sun is shining. As a bird in the hand beats any ten in the bushes, reach out and grab a sure thing. Get while the getting is good – before the gravy train passes you by forever en route to its final depot.