Tuesday, February 15, 2005

Are Rates Dipping Or Rising?

"Mortgage Rates Dip Deep"
"Adjusting to rising mortgage rates now reality"
"30-year mortgages fall for 6th week"
"Treasury bill auction sees three-year high on interest rates"
"Mortgage Rates Steady And Low"
"Home Refinance Rates Dip"

Looking at these headlines can make the mind reel for consumers trying to get a fix on where rates are and where there going. The articles themselves identify the rates being discussed. These could be short term rates or long term rates. Adjustable or fixed.

When hearing that rates are rising homeowners who failed to refinance their mortgages in the last year or two probably figure they missed the boat. Reports of rates rising have slowed refinancing compared to the wave seen in 2003 and parts of 2004. What many homeowners don't know is that the boat has apparently come back to the dock. How so?

Months ago economists projected that the interest rates which mortgage rates are tied to, would increase to more than 7 percent once Lender tack on the spread. To the contrary we're seeing rate levels at 5.35 to 5.6 percent on 30-year mortgages and around 5 percent, or even a little lower, on 15-year mortgages.This may be a surprise to some consumers who assume that rates have been rising in tandem with short-term loan rates, which the Federal Reserve Board has been pushing higher since last fall.

While rates are going up on short-term loans and home equity lines - long term mortgage rates are as low as ever.

Tip: Low rates may not last much longer. Real estate market is in its seasonal lull and stronger demand in the spring usually helps push rates higher. If you must get financing for spring and summer projects do it now.