Mortgage Informer

With mortgage rates hovering around the 5% mark, it is still advantageous to purchase a home. These rates will begin to rise as the Federal Reserve begins to withdraw excess liquidity from the economy, which they will have to do in the near future. This will lead to increased mortgage rates. The only situation that homeowners should be aware of is that the home they are interested in, is not located in an area where home prices still have more downside.

5% Still An Excellent Rate

There’s an old saying that death cancels everything but truth. Nice sentiment, although it’s not quite right. Still owe a chunk on your mortgage when you die? Your partner, children or estate have to pay it off. That’s why mortgage life insurance is so popular.

Mortgage life insurance guarantees that your remaining mortgage will be paid off in the event of your untimely demise, but it doesn’t come cheap. It can add more than 10% to your current mortgage payment depending on the size of the mortgage and how old you are. That’s not an insignificant sum to get a little peace of mind, and critics point out that the amount paid declines along with your mortgage even though your rates stay the same.

Prospective homebuyers should know that since the beginning of the year, two important events have occurred with mortgage offerings.  First, the rates on some types of mortgages have declined.  Second, a number of lenders have introduced new mortgage plans as a way of competing for your business.

Recent figures released by the Bank of England indicate that the interest rates on tracker mortgages and fixed-rate mortgages have decreased in recent weeks.  At the same time, many of the newer mortgage offerings require a smaller deposit, something that may be very attractive to people who want to move forward with buying a new home.

Dear Dr. Don,
I am 39 years old and about to buy my first home. I am looking at a house that costs $250,000 and am planning to go for an FHA loan when selecting a home mortgage. According to my loan officer, the monthly payment is going to be $2,100, not including utilities. I bring home $4,200 a month. Is it wise to spend 50 percent of my monthly income toward a mortgage? In another words, can I afford it? Please advise at your earliest convenience.
– Emba Evaluates

The government mortgage refinance plan was created to help homeowners save money with lower mortgage interest rates. If yu are looking to save money on low 15 year fixed rates then there are opportunities available for you. At the present time the 15 year fixed mortgage rate has been quoted as low as 4.23%.

It is important to understand that you are going to pay more in monthly payments on 15 year fixed mortgage rates than 30 year fixed mortgage rates. Obviously the term of your mortgage is going to be much shorter therefore the payments will be higher. What you also need to understand is that you will save a significant amount in interest over that time.

Mortgage rates in the U.S. rose for the first time in five weeks, threatening to slow the housing market’s recovery as government incentives near expiration.

The rate for 30-year fixed U.S. home loans rose to 5.01 percent for the week ended today from 4.98 percent, mortgage finance company Freddie Mac said in a statement. The average 15- year rate was 4.40 percent, according to the McLean, Virginia- based company.

Rising rates make it more expensive for consumers to buy homes. Sales of existing homes climbed 5 percent in 2009 after falling for three years. Demand rose as buyers took advantage of an $8,000 government tax incentive and low mortgage rates.

The regulator for Fannie Mae and Freddie Mac on Tuesday defended the way it has overseen the two mortgage finance agencies since the government took control of the firms a little more than a year ago, including the decision to allow multimillion-dollar pay packages for top executives.

“As conservator, I believe it is critical to protect the taxpayer interests in the Enterprises by ensuring that each company has experienced, qualified people managing the day-to-day business operations in the midst of this uncertainty,” Federal Housing Finance Agency Acting Director Edward DeMarco said in a letter to lawmakers.