Current Mortgage Report
Current mortgage interest rates are still in the 6%-7% range for 30 year fixed rate mortgages. The most significant change taking place is the tightening of borrower qualification criteria. These changes have made it more difficult for home buyers and homeowners who want to refinance their mortgages to qualify for the lowest interest rates available.
If you are among those homeowners who have less than stellar credit, it will be more difficult for you to get rid of your ARM and convert to a long-term fixed rate loan. But it is still possible if you have some equity in your home and have a credit rating not damaged by late payments and over the limit balances on your cards.
Federal Reserve Influences. Federal Reserve chairman, Ben Bernanke hinted about his concern of inflation. The general consensus seems to be that the Fed will not be raising interest rates during the coming months. However, that could change quickly if inflation data shows significant increases.
Generally, the mortgage market is very volatile at this time with a variety of fronts that could create havoc in the market. Many lenders, especially those who have funded so-called subprime loans have run into trouble in recent months. Some simply closed shop, while others stopped making new loans as they tried to ride out the storm. California saw the most casualties, with some 25 lenders based in the state closing.
What should a homeowner do? If you are among those who have an adjustable rate mortgage that is slated to reset during the next couple of months, it is time to look now to convert that mortgage into a fixed rate mortgage. All data points to an increasingly difficult mortgage market in the future with potential higher interest rates and further tightening of qualification guidelines.