By Marcie Geffner – LendingTree.com
The trade group of mortgage bankers in Washington, D.C., has forecast that the average interest rate on a 30-year fixed-rate mortgage will increase to 5.7 percent by the end of 2010 and 6.1 percent in late 2011. That’s significantly higher than current mortgage rates, which were 4.79% for a 30-year fixed-rate mortgage the week ending November 27, 2009.
Forecast predicts higher mortgage rates
Borrowers will face jumps in mortgage rates on the 30-year fixed-rate mortgage almost every quarter for the next two years, if the forecast proves accurate. Specifically, the forecast predicts the average interest rate on a 30-year fixed-rate mortgage will be 5.3 in the first quarter of 2010, 5.5 percent in the second quarter and then 5.6 percent and 5.7 percent in the third and fourth quarters, respectively. Mortgage rates in 2011 were forecast to be 5.8 percent in the first quarter, 6 percent in the second quarter and 6.1 percent in the third and fourth quarters.
Higher mortgage rate means higher payment
A small increase in the mortgage interest rate on a 30-year mortgage may seem insignificant, but in fact, even a slightly higher mortgage rate turns into a higher monthly mortgage payment. And the more the interest rate rises, the higher the payment will be.
For example, the monthly payment on a $350,000 mortgage at an interest rate of 5.1 percent is $1,900. Jump the interest rate to 5.5 percent, and the monthly payment goes up to $1,987, an increase of $87 per month. If the interest rate jumped a full percentage point to 6.1 percent, the payment would go up to $2,121. The payment on the same loan amount at 4.75 percent—a rate that’s available to some borrowers today–would be just $1,826.
Interest rates are still low—for now
Clearly, home buyers and homeowners who want to refinance should act soon if they want to take advantage of today’s low interest rates and avoid the MBA’s forecasted mortgage rate hikes. Home buyers who may want to wait for hoped-for lower home prices should weigh the advantages of a lower home price against the risk of a higher interest rate.
Take advantage of low rates!
Custom Colonial (36 x 28 foundation) with 4 bedrooms including a Master Suite, 2.5 baths, first floor laundry, front to back family room boasting a fireplace with an atrium door that leads to a 22×11 deck that is surrounded and decorated by a serene private lot (.83 acres)!! and more! Many updates!
Custom Colonial (36 x 28 foundation) with 4 bedrooms including a Master Suite, 2.5 baths, first floor laundry, front to back family room boasting a fireplace with an atrium door that leads to a 22x11 deck that is surrounded and decorated by a serene private lot (.83 acres)!! and more! Many updates!
Meet us between 9:15 and 9:30 at 301 Franklin Street in Hanson to tour this house and others
Lunch will be back at 301 Franklin Street in Hanson…at the end! Carpools and Bring Office Mates and Colleagues!
March into Spring Caravan Tour!!!
March 3rd, 2010
Meeting at 301 Franklin Street in Hanson
Between 9:15 and 9:30 (LEAVING AT 9:30 sharp!!)
Start up at 2 Upton Street in Hanson
$170,000 or BEST OFFER..Make an offer!
Think out of the box and offer..says Amy Troup of Molisse Realty Group
781-775-5229
Proud to show you 62 Chandler Mill Road in Hanson
The Dream Location at the end of the cul-de-sac...4 beds, 2.5 baths, fireplace, PRIVATE and more
End of the Road Dream local… Amy Troup…
Skip over to 25 Stetson Heights in Pembroke
Lead by Mr. Ben Perotta! Of Re/Max Paramount
781831-0340
Basically across 27…to 27 Malinda Road in Pembroke
Presented by Nancy Virta of Virta and Associates!
(617) 719-1483
Across to 106 Cross Street
Thanks Mr. Peter Kenney
617-851-7431
274 King Street in Hanson
Hosted by Susan F. Woomer of Atlantic Brokerage Group
(781) 526-6172
Down the Trail to 178 Forest Trail in Hanson
Listed by Peter Kenney of Jack Conway
(617) 851-7431
Next…off to 167 Raynor Ave in Whitman
Thanks Dan Desousa of Keller Williams Real Estate
(508) 378-3050
And back to the Carpool Beginning and LUNCH
Thanks to the Harrington Team of First Eastern Mortgage!
AT: 301 Franklin Street in Hanson!
Please bring along office mates and colleagues!
I have received 3 showings over the past 1.5 weeks from a Caravan tour one month ago…and I sold a house…just last month due to this…and MORE!!
Thanks as always for your participation…I can’t wait to see you and your listings!!
Sincerely, Amy Troup