Reverse Mortgage Guide

While must attention has been paid to the efforts of the Federal Reserve to lower short-term rates, mortgage rates have soared in the past two weeks.

Freddie Mac reported yesterday for the week ending Feb. 28th that 30-year fixed-rate mortgage averaged 6.24% with an average 0.5 point

That’s up 20 basis points from the week before, an increase of .2 percent in just seven days. (a basis point is equal to 1/100th of a percent).

To give some perspective regarding what is going, consider that about a month a go, on Jan. 24th, Freddie Mac said that same 30-year fixed-rate loan could be had for 5.48% with .4 points.

For all the chatter in Washington about helping homeowners with mortgage problems, the worst possible event is now unfolding. If mortgage interest rates continue rising then millions of ARMs will go into overdrive with stiffer payments looming in the future.

For those who are considering a reverse mortgage, you really need to consider that current interest rates are at the very low end of the scale when compared with rates during the past half century. If you’re thinking about a reverse loan, either fixed or adjustable, you surely remember when mortgage rates were in the 8 percent and 9 percent range — and you also remember when they were in the teens.

No one knows where rates will be in the future, but it’s not realistic to believe that they can stay at or around 6 percent eternally.

This entry was posted on Friday, February 29th, 2008 at 3:17 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.