|
|||||
|
The Mortgage Report Rates at Lowest Point in DecadesAs of Friday, November 28, 30 year fixed rate mortgages are down to the low to mid five percent range. In the twenty-five plus years that I've been in the finance business, I don't remember rates ever being this low. The interest rate on thirty year mortgage loans generally goes up and down based on what the 10 year treasury note does. This is because the average mortgage loan is only open about eight years before it is paid off or refinanced, so lenders/investors know they can get guaranteed, insured returns for a comparable time period, so they price mortgage loans roughly in relation to those bonds, with a premium built in as a reward for the risk and to allow for defaults. Generally that premium is 2.5 to 3%, although many different market forces can influence this premium one way or another at any given time. Last week, the ten year treasury note yield closed below 3% for the first time since it's been issued. As I understand it, this drop in treasury yields is being fueled by an influx of investment money fleeing the stock market. The flood of negative news coming out about the economy is making investors cautious about the future (although why this is just happening now, I don't know). Will rates go any lower? Your guess is as good as mine. But if you are thinking of buying or refinancing, it's definitely time to run the numbers…they may not look this good again for a long time. Carl Trawick is a Mortgage Specialist and Licensed Mortgage Broker with the firm Access e*Mortgage. He can be reached at 904-343-1145 or ctrawick@nefcom.net |
      |
||||
