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Rates Fall to 50-Year Low
Written by Thad Wise & Carter Scott, Bank of America   
Friday, 19 December 2008 00:00
I’m sure you’ve all heard the news buzzing about the interest rates.  Information was recently released about the Treasury’s potential mortgage market intervention in order to significantly lower consumer mortgage rates.  After this hit the newsstands, consumer interest rates dipped and we are currently near a 50-year low on the 30-year fixed rate.  Check out the following newspaper articles... Post - Treasury Weighs Action on Mortgage Rates, WSJ - U.S. Plans to Lift Home Sales, Post - 30-Year Rates Fall to Four-Year Low.

The Treasury’s full plan is still unknown, but the movement in the markets has really helped some homeowners significantly lower their mortgage payments.  The drop in rates is also very good news for potential home buyers.  Here is a real life comparison of rates from 6 months ago and today:

Date Loan Amount Loan Type Interest Rate Principal & Interest
Payment
07/15/2008  $350,000 30-Year Fixed Rate  6.375% $2,183
12/19/2008 $350,000 30-Year Fixed Rate  4.625% $1,799
07/15/2008 $350,000 FHA Financing  6.500% $2,212
12/19/2008 $350,000 FHA Financing  5.000% $1,879

Rates are based on very well-qualified borrowers and the monthly payment only includes principal and interest.  Taxes, insurance, and association/condo dues would be additional.  Based on the comparison of conventional 30-year fixed rates example, there would be a monthly savings of $384, equivalent to $4,608 annually.  In the FHA financing example, there is a $334 monthly savings, equal to $4,008 annually.  Each individual scenario is different, so please feel free to contact us any time for quotes or information about your loan... We are able to help with home purchases and refinances.  We wish everyone a Happy Holidays!