Mortgage Rates Are At An All Time Low
Posted on | January 19, 2012 | No Comments
In the U.S., the 30-year fixed average monthly mortgage rates have gone down to an all-time low of 3.94% from 3.99% against the previous week and against last year from 4.83%. The same goes for the 15-year mortgage rate from 3.21% to 3.27% against the previous week and 4.17% from last year.
Regardless of the low rates, the demand for housing is still weak and unstable. Actual sales are actually lower than the sales forecast, and prices are still dropping. The low interest rates permit lenders to offer their best deals, while borrowers are experiencing a difficult year in terms of meeting the criteria for lending. Still, some home buyers are able to take advantage of the low mortgage rates.
However, these rates are not helpful for a large portion of potential home buyers. This is because they can’t take advantage of the current rates because banks and lenders have tightened loan rules and credit standards. Even with the low rate, loan applications dropped 4.3% against previous week. The same goes for refinance applications, which went down by 5.2%.
In England, the average mortgage rate payment is 494 Euros a month, making it their best mortgage deal in a decade. Records from ten years ago showed that 2008 had the highest mortgage rate. It appears that home buyers could actually cope with England’s base rate should there be any changes on the interest rates or circumstances. Those who would grab the low mortgage rate said that they already have plans in case the rates go up again. Their strategies are cutting down “lifestyle” expenses such as clothes, shoes, holiday trips, dining out, etc to balance mortgage increase. The Bank of England’s forecast is that lenders will widen their mortgage range followed tougher and stricter lending rules. The Bank’s latest survey found that lenders are designing a better deals made especially for small-time depositors. Small-time depositors are first time buyers and this new great deal will somehow help them acquire property. Nevertheless, lenders believed that overall approvals for loan application may drop due to low credit approvals brought about by tighter loan rules following unstable economy and euro crisis.
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