Posted on: 01st Nov, 2005 08:53 pm
Mortgage rates go high for seven weeks in a row
The US economy seems to be making progress and experts believe that this might be the reason of the interest rates being the highest for the past 2 months. The economy registered an annual growth rate of 3.3% in the second quarter of this year. Investors and economists roughly evaluate the third quarter growth to be around 3.6%. Unless there is sufficient productivity, such faster growth may lead to inflation and the probability of higher inflation may cause interest rates to rise.
This year itself the rates for 30 year fixed rate mortgage rose 7 basis points to 6.24% as projected through a national survey. The discount and origination points for all mortgages had an average of 0.29% this week. On the other hand, the 15 year mortgages rose 7 basis points to 5.79%. But the rates of adjustable rate mortgages could register a rise of 5 basis points to 5.82%. Financial experts consider the rates on fixed rate mortgages to be quite attractive this year because these have been below 7% since April 2002.
But mortgage rates are expected to reach 6.8% by the end of 2007. However, economists consider this growth to be moderately low as per historical standards. As of now, the rates are expected to rise by 1/4th of a percentage point for the remaining part of this year. Investors also anticipate that Federal Reserve may increase the rates of short term loans to any unexpected value. As far as the long term loans are concerned, the rates may rise another 40 to 50 basis points by next year.
Jessica Bennet
Mortgage Mentor
The US economy seems to be making progress and experts believe that this might be the reason of the interest rates being the highest for the past 2 months. The economy registered an annual growth rate of 3.3% in the second quarter of this year. Investors and economists roughly evaluate the third quarter growth to be around 3.6%. Unless there is sufficient productivity, such faster growth may lead to inflation and the probability of higher inflation may cause interest rates to rise.
This year itself the rates for 30 year fixed rate mortgage rose 7 basis points to 6.24% as projected through a national survey. The discount and origination points for all mortgages had an average of 0.29% this week. On the other hand, the 15 year mortgages rose 7 basis points to 5.79%. But the rates of adjustable rate mortgages could register a rise of 5 basis points to 5.82%. Financial experts consider the rates on fixed rate mortgages to be quite attractive this year because these have been below 7% since April 2002.
But mortgage rates are expected to reach 6.8% by the end of 2007. However, economists consider this growth to be moderately low as per historical standards. As of now, the rates are expected to rise by 1/4th of a percentage point for the remaining part of this year. Investors also anticipate that Federal Reserve may increase the rates of short term loans to any unexpected value. As far as the long term loans are concerned, the rates may rise another 40 to 50 basis points by next year.
Jessica Bennet
Mortgage Mentor
Hi Caron,
Its really some good news now that rate hikes have not been much this week. I thought we will be having a tough time indeed if rates increased to any higher mark.
Lets hope that rates remain almost stable in the following weeks. After all Christmas is approaching and we really need to shop a great deal apart from paying off debts.
Its really some good news now that rate hikes have not been much this week. I thought we will be having a tough time indeed if rates increased to any higher mark.
Lets hope that rates remain almost stable in the following weeks. After all Christmas is approaching and we really need to shop a great deal apart from paying off debts.
hi caron, i went through what you call the snowball and finding it useful to pay all my debts. I just want to clear my dues, as i need to shop a lot as Christmas is about to come. What i wanted to know is if you can give some tips for savings. I really need to save from now, otherwise it is going to be a bit tough to clear up the debts in near future.
Hi Catherine,
Feels good to hear that you have benefitted from our suggestions. You have raised an important issue - how to save? This is something which often bothers many and people keep asking me about some of the easiest ways to increase their savings. In case you haven't accumulated much of your income, start from now onwards. Let me give you some tips:
Regards,
Caron.
Feels good to hear that you have benefitted from our suggestions. You have raised an important issue - how to save? This is something which often bothers many and people keep asking me about some of the easiest ways to increase their savings. In case you haven't accumulated much of your income, start from now onwards. Let me give you some tips:
- Check out your expenses, whether you are wasting too much on unnecessary things. See that you spend as much as you can afford and try to accumualte some amount from your income.
- Try to save a certain percentage of your income for your retirement savings. You may use either 401k or Roth 401k depending upon certain conditions. Take help from a financial advisor if required.
- Avoid using more than 2 credit cards. Restrict yourself to 1 or 2 cards with the lowest rates and utilize them only for some major purchases or in case of emergencies. Also try to be regular while paying your credit card balances.
Regards,
Caron.
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