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Thinking of a Refinancing Mortgage Rate?
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Recent Refinancing Mortgage Rate News: Most Interest Rates on the Rise
According to the weekly Bankrate monthly mortgage survey, the interest rates on mortgages are increasing, even for the mortgage terms most used for refinancing homes. However, this rise is not necessarily a cause for alarm.
In January 2008, the interest rates were down to 5.57% then rose to 6.41% just one month later. After decreasing again in early spring, the rates for a 30-year fixed mortgage were at 6.20% when for last week.
Interest rates on 15-year fixed rate mortgages also went up to 5.8%. Because of the reduced term, these mortgages are often popular with people looking to refinance.
The cause of the increase is a concern about inflation. As prices on everything from cars to bread goes up, so do interest rates. Rates have decreased when concerns about the housing slump overshadowed those rising costs.
What does this mean for homeowners looking to refinance their homes? Should they wait or should they lock in a rate now?
Most experts recommend acting now. Although the rates may go down again in the near future, economists are betting that the concerns about the inflation are going to stick around, especially with gas prices hovering around $4 a gallon and insurance premiums jumping up regularly.
That means if you can find a reasonable fixed interest rate for a 15 or 30 year mortgage then it would be a good idea to take action now. Even as early as next month, the interest rates could take another jump and for each increase you will end up paying more per month.
Jumbo Loans – Interest Rates Reduced
Jumbo loans are usually mortgages valued at more than $417,000. Until recently, individuals who took on such mortgages had to pay higher interest rates – sometimes as much as 1% higher. These loans were not able to be guaranteed by organizations such as Freddie Mac or Fannie Mae.
As May ended, however, the government decided to make some changes due to the problems in the housing marketing. First, Congress passed legislation increasing what qualifies as a jumbo loan, at least in some parts of the country. In Washington, for example, a jumbo loan is anything above $749,750. Additionally, the rates on these loans were decreased by about 1% which brings them more in line with current rates on other fixed mortgages.
While the government hoped this change would be enough to give the housing market a much needed boost, experts don’t believe the interest rate cut will be enough to make much of a difference to new buyers or refinancers.
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