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Weekly Interest Rate Update
The 10-year U.S. Treasury bond is considered the benchmark and is
most often used to measure mortgage rates. As of today the 10-year
treasury bond is yielding 4.65% (up from 4.57% on Friday, October
29th) the highest level since June 2004. As the yield on the 10-year
treasury bond rises, mortgage interest rates also rise.
The Federal Reserves decision to raise the federal funds rate by
.25% on Tuesday, caused mortgage interest rates to rise this week.
In addition the Federal Reserve made public comments suggesting
that they are not finished raising interest rates. Some of this
is due to the belief that rebuilding from the hurricane damage on
top of high crude oil and heating oil prices are putting inflationary
pressure on the economy.
In the Spotlight
Home Equity Line of Credit (Heloc)
We have access to a Heloc that is offering Prime Rate minus .50%
(Prime rate is 7.00% minus .50% equals 6.50%). This Heloc also has
a feature which allows you to lock in a portion or all of your existing
balance into a fixed rate. This is useful for amounts you may not
pay-off in the near future, especially since it is widely expected
the Federal Reserve will raise interest rates by another .50% before
Federal Reserve Chairman Alan Greenspan leaves office in January
2006.
If you have an existing Heloc, take a look at your current interest
rate. Many Helocs are at Prime plus 1% to 3% bringing the current
interest rate to 8% to 10%.
Call or email me if you would like to see if you qualify for this
excellent Home Equity Line of Credit.
Mortgage Analysis
I have been recommending for those people who have an adjustable
rate mortgage or a fixed rate mortgage that will become an adjustable
rate mortgage within the next 5 years to seriously consider refinancing
into a longer term fixed rate mortgage.
There are signs that we are in the beginning stages of a prolonged
period of rising rates. Take the opportunity today to protect your
monthly payment from further increases by extending the fixed rate
period on your home mortgage.
Everyone's situation is unique, therefore I am offering a personalized
total cost mortgage analysis as a complimentary service for those
of you who would like to see if you will benefit by refinancing
today. The analysis is a complimentary service, with no cost or
obligation.
If you have an adjustable rate mortgage, it's important to review
your mortgage statement monthly to know when your interest rate
adjustments will occur, as these mortgage programs have adjustment
periods that can occur every; month, 3 months, 6 months or yearly.
Have a great weekend!
In next weeks update ~ mortgage strategies for a rising interest
rate environment.
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