Current Real Estate Interest Rates

The natural economic theory goes like this. If home prices go down, then home interest rates go up. Housing prices are still dropping and may continue to drop for the next several years. Home buyers know that buying now will result in an immediate loss. The other side of the coin, shows lenders are increasing the real estate interest rates. The refinance applications have dropped because of this rate increase. Currently, the refinance rate is one point lower than it was three months ago.

Most borrowers will pay 5.59 percent for a 30-year fixed rate mortgage. It’s a higher rate than a couple of months ago; however, it’s a good deal if you can get an interest rate less than 6.5 percent. The current rate is low due to the $700 billion bailout. The government is backing 90 percent of the all the mortgages. The mortgage industry has been nationalized, consequently, the low interest rate. The low interest rate may surprise you since the economy is in a recession. There have been too many foreclosures and home prices are down. Now is a good time to refinance to save your home from foreclosure if you can meet the tight criteria. Lenders want you to have 20 percent equity in your home. If you can’t meet the bank’s criteria, you can find out if you qualify for a Federal Housing Administration loan. The low down payment and the low interest rates make FHA loans appealing.

People make poor financial decisions when they trust greedy and unethical lenders. The next couple of years are going to be tough. You may be better off if you rent. In addition, homeowners are also responsible for other fees like property tax and insurance.