With mortgage rates near their record low, many experts are advising Buyers to get their mortgage locked in now because these rates are likely to rise.
Based on a Bankrate.com survey of large lenders, the 30-year fixed-rate mortgage fell 4 basis points this week, to 5.11 percent. "The mortgages in this week's survey had an average total of 0.45 discount and origination points. One year ago, the mortgage index was 5.34 percent; four weeks ago, it was 5.15 percent." The 15-year fixed-rate mortgage fell 1 basis point, to 4.51 percent. The 5 Year ARM mortgage fell 5 basis points, to 4.51 percent.
"Mortgage professionals believe rates are poised to jump sharply within a few weeks." The rates are expected to rise because Federal Reserve plans to stop buying mortgage-backed securities by the end of March and many believe the result can be a rise of a full percentage increase in rates within the year!
Over the past year, the Fed has been purchasing up to 4/5th of new mortgage bonds keeping them at these low rates. Once they pull out and private financing has to back these bonds, many believe the rates will have to increase to get the private financing sector to accept the risk. Because of that, some are saying we will see 6% by year's end.
To compare rates and apply for a mortgage online, click here.
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