What About Interest Rates?

What about them?  It seems to me that people have stopped paying attention.  Like everything in life that is plentiful or comes easy, we start to take things for granted.  Let’s face it – interest rates have been very favorable for the past couple of years.  A number of factors contribute to the current low rates: the slow economy, lack of inflation and US bonds still being considered a safe haven for investors seeking a conservative return on investment.

So why should anyone care that this week (July 1, 2010) RATES HIT THE LOWEST LEVEL SINCE 1971 when Freddie Mac began tracking rates on 30 year fixed mortgages?  Rates may stay low for the next 3 months, 6 months or maybe even a year – but eventually rates have to go up and when they do, the cost of home ownership will increase sharply.  For every 1% rise in rates, the payment on a $250,000 mortgage goes up $152.00 per month.  When rates go back up to 6.5%, which has been considered a very good rate historically, the payment on a 30 year fixed loan jumps from $1,267.00 to $1,571.00.  That is an increase in cost over a 10 year period of $36,480.

In life it is often said that success is in the timing.  For anyone considering buying a primary, vacation or investment property, now certainly seems to be an excellent time both property price wise and interest rate wise.

How low did rates go the week of 7/1/10? Mid 4% range and 15 year loans in the upper 3% range.  Contact Superior today to seize this historic opportunity.

Stephen M. Cors
CEO
Superior Mortgage Corp.