Interest Rates Going Up by Rules, Not by Market

January 2nd, 2014

There are increases coming to mortgage interest rates due to several rule changes. One change is a proposed increase in the guarantee fees, also called the g-fees. This fee will increase 10 basis points, which is equal to 1/10th%. There are also increases coming to what I call add-ons. Add-ons are fees charged by Fannie Mae and Freddie Mac, that vary depending on credit score and down payment of each mortgage borrower. Read the rest of this entry »

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Historical Interest Rate Chart

August 2nd, 2013

It seems the big discussion in the mortgage world lately has been about interest rates. I think it is important to put the discussion into some context, and what better context than to look at interest rates historically. The chart below tells the whole story. You can see that the average interest rate level in our country dating back over 40 years is quite high compared to current interest rates. The average interest rate is quite high compared to current rates even if they go up another 1%. The average interest rate is still higher when compared to current rates even if they go up another 2%. Read the rest of this entry »

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Are Interest Rates Too High?

July 16th, 2013

Interest rates are becoming a hot topic lately. With interest rates shooting up approximately 1% in about a month, there is plenty to talk about. It seems that some people were only in the housing market as a result of give away mortgage rates. When I hear someone exclaim surprise when I quote a 4.5% interest rate, because they heard rates were at 3.5% six months ago, it actually shocks me that people are surprised. It is as if most people expected rates to stay down forever. Any casual student of interest rates and general economics knows that interest rates, as with any market, move up and down constantly. Read the rest of this entry »

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