Check These Rates!

Average rate on 30-year loan up to 4.39%

Mortgage Rate Trend Index

Almost half (42%) the mortgage experts polled this week by Bankrate.com expect rates to decline over the short term. The rest are equally divided: 29% foresee a rate increase while 29% say rates won’t appreciably change.

WASHINGTON – Aug. 2, 2013 – Average rates on U.S. fixed mortgages ticked up this week but are still low by historical standards, a trend that has helped the housing market recover.

Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan rose to 4.39 percent from 4.31 percent last week. Rates are a full percentage point higher than in early May.

The average on the 15-year fixed loan increased to 3.43 percent from 3.39 percent last week.

Rates spiked in June after the Federal Reserve indicated it could slow its bond purchases later this year, which have kept long-term interest rates low.

But on Wednesday the Fed hinted it might hold off because the economy remains sluggish. And it noted for the first time that mortgage rates, which have fueled home sales, “have risen somewhat” from record lows.

Mortgage rates tend to follow the yield on the 10-year Treasury note, which has also jumped on speculation that the Fed could slow its stimulus.

Despite the increases, mortgages are still a bargain for those who can qualify. And low rates are helping boost home sales in most markets and driving home prices up.

Home prices jumped 12.2 percent in May compared with a year earlier, according to the latest Standard & Poor’s/Case-Shiller 20-city index released Tuesday. That’s the biggest annual gain since March 2006.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was 0.7 point this week, down from 0.8 point last week. The fee for a 15-year loan also declined to 0.7 point from 0.8 point.

The average rate on a one-year adjustable-rate mortgage dipped to 2.64 percent from 2.65 percent. The fee was unchanged at 0.4 point.

The average rate on a five-year adjustable mortgage rose to 3.18 percent from 3.16 percent. The fee declined to 0.6 point from 0.7.
 Copyright © 2013 The Associated Press, Marcy Gordon, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redis

Extra-Low Mortgage Rates

3 Reasons Not to Refinance at Extra-Low Rates

Be on guard against those low, low mortgage rates - you may end up spending more by refinancing than if you had stuck with your current mortgage, even if your new interest rate would be under 3 or 4 percent financial planners warn.
Here are 3 warning signs for not refinancing your home at a lower rate:
-You're one of the many homeowners who owe more than what the home is worth. Lenders may ask you to pay a higher rate of interest, perhaps a quarter or half percent more than the average national home loan interest rate, mortgage brokers say. Even worse, a prospective lender may ask you to pay property mortgage insurance, which will add thousands of dollars to the cost of your loan, says Deerfield Beach, Fla., financial planner Blair Shein.
-There's a chance you might move to take a new job. If you don't stay in your home for at least two years then you may actually lose money on refinancing, says Plantation, Fla., financial planner Matt Saneholtz, who is president of the Financial Planning Association of Greater Fort Lauderdale. That's because you won't have time to recoup the closing costs, he said.
-You will end up paying more. If you have less than five years to pay, then you will generally pay more if you take out a longer loan, even if it offers a much lower interest rate, Shein said. That's because the longer loan length means more interest costs although your monthly payment will be smaller, he says. You only come out ahead if you continue making your existing loan's bigger payments on the new loan. That will ensure you will pay less interest - and pay off the loan even quicker, he said. "But the reality is that most people don't that," Shein says.
Homeowners should examine all the costs before signing up for a new loan. "Do the math," financial planner Saneholtz says. And beware of the hidden closing costs: You may not have to pay any when you sign for the mortgage, but those costs will be added to your new loan - often involving thousands of dollars, he says.

©2012 Sun Sentinel (Fort Lauderdale, Fla.) Distributed by MCT Information Services and RISMedia