Hi,

The year began with mortgage rates continuing to register a slight increase. The average for 30-year fixed rate mortgage increased by two basis points closing at 6.29% whereas the increase for hybrid 5/1 adjustable rate mortgage increased by nearly six basis points to register at 6.17%.

Inflation is not at desired levels and it is suggested that many sectors of the economy will continue to function below par for the greater part of this year. With the economic fundamentals maintaining an even course there are no indications of changes in Fed rates.

There is a sharp decline in residential construction and unless existing inventories are cleared there cannot be scope for further growth. Good levels of employment and a predictable economy influence the movement of mortgage rates. The increase in rates is only marginally higher than the recent lows with a likelihood of a further rise by at least two basis points in the coming week.


Thanks and Regards
Rob Thomos
robthomos19@yahoo.com
Mortgage Loan Expo

WASHINGTON - Rates on 30-year mortgages dropped this week to the lowest point in four months, providing some relief for people hoping to refinance their existing mortgages.

Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 6.31 percent this week, the lowest level since May 17, when 30-year mortgages averaged 6.21 percent. The rate had been 6.46 percent last week.

All mortgage products surveyed by Freddie Mac showed declines this week. Frank Nothaft, the company's chief economist, said this should provide help to homeowners who are hoping to refinance existing adjustable rate loans that are resetting from low introductory "teaser" rates.

An estimated 2 million such loans will reset over the next 18 months, raising fears about a wave of delinquencies as homeowners are unable to meet the new payments. Top Bush administration officials met with major mortgage servicing companies on Wednesday to urge them to extend as much assistance as possible to homeowners trying to avoid default by refinancing into mortgages they can afford.

Many economists believe the Federal Reserve will decide at its meeting next Tuesday to cut a key interest rate in an effort to insulate the economy from recent turmoil in housing and financial markets.

Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, averaged 5.97 percent this week, down from 6.15 percent last week.

Rates on five-year adjustable rate mortgages averaged 6.17 percent, down from 6.32 percent, while one-year ARMs dropped to 5.66 percent, compared to 5.74 percent last week.

The mortgage rates do not include add-on fees known as points. Thirty-year mortgages carried a nationwide average fee of 0.5 point while 15-year mortgages carried an average fee of 0.4 point. Five-year ARMs had an average fee of 0.6 point and one-year ARMs carried an average fee of 0.8 point.

A year ago, rates on the various mortgage types were all higher. Thirty-year mortgages stood at 6.43 percent this time last year, 15-year mortgages were at 6.11 percent, five-year ARMS averaged 6.10 percent and one-year ARMs were at 5.60 percent.

After a five-year boom, sales of both new and existing homes fell sharply last year. The slump has gotten worse this year as lenders have tightened standards amid soaring foreclosures and late payments. Those problems began in the market for subprime loans, which are offered to borrowers with weak credit histories, but have now spread to other loan categories.

__________________
Home Improvement Loan | Personal Debt Consolidation Loan | Home Loan Refinancing | Debt
Consolidation