Rates Are Still Low

January 19th, 2010

Interest rates remain low, and have been low, for years it seems like. Although a consumer may complain about getting 5.625% instead of 4.875%, rates have been in a very tight range for quite a long time. We have not had a rate with a ‘6’ in front of it for years. And I can remember when 6% was thought to be a very low rate!

Of course, the whole discussion of rates has to incorporate the price of what one is financing. Today’s real estate prices in the Washington DC metro area, even after softening of late, can hardly be called modest. Hence, I believe consumers need lower rates to enable to them to even begin to afford to pay the mortgage on a home.

As of today, you can get a loan at $417,000 or less at 5% with 0 points. You can get a loan from $417,001 to $729,250 at 5.25% with 0 points. And you can get a loan above $729,251 at 5.75% with 0 points. And you can get a full update on all loan programs, here: Interest Rate Chart.

All of those options are very attractive. The question remains, will rates go lower and should one wait to buy? Or will both rates and prices go lower? Or will rates go higher causing real estate prices to go lower? Or will rates stay the same and prices go higher?

It is hard to guess, and its impossible to know. That is why I believe if you need a home, and want a tax break, and can commit to a home and a specific area for a longer term, then it is likely safe to buy now.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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