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 Interest Rate Update
By: Darin "Sid" Cameron, CRS
Fri, May 6th, 2005 3:13 pm

For the fifth straight week, long-term mortgage interest rates were flat if not down again.

Bankrate.com estimates the 30-year fixed-rate average remained stagnant from last week at 5.31 percent, and the 15-year fixed-rate also saw no move to stay at 4.9 percent. Freddie Mac estimates the 30 year average to have actually dropped .03 points to 5.75 percent.

This is an interesting trend because experts have been predicting that rates would rise significantly for over a year now and in March it appeared the bubble had burst when rates finally began to creep upwards (even though they then reversed course and declined again). Although it's tempting to just ignore the "experts" who keep making these predictions, rates have been at or near a 50 year low for quite some time now. Even though today's rates are actually BELOW rates from a year ago, it's probably only a matter of time before they eventually begin inching upwards because, after all, they really can't get a lot lower.

The question is, what does this mean to you?

Let me over simplify this a bit. When you go to apply for a home loan the amount you are able to borrow to buy a house is based on how much the bank determines you can afford to pay back each month. The monthly payment is then broken down into how much you are paying the bank in interest and how much is actually being applied to paying for the home. If interest rates go up, the amount you can borrow decreases because interest takes up more of your monthly payment.

As a result, if you've been thinking about buying a home or upgrading to a newer or larger home and haven't yet, you probably want to watch those rates because you might eventually find yourself priced out of that home you want (when/if rates begin to edge upward). It also means if you've been thinking about refinancing but just haven't gotten around to it, you might want to use this latest repreive to begin the process.

Although this isn't my area of expertise, I am happy to refer you to some lenders that we trust if you want to shop around for a rate or just ask some questions. Send us an e-mail and we'd be happy to help.

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On the Web:
www.bankrate.com
www.freddiemac.com

(Side Note: I just realized this is the first time I've had a chance to blog before 11:30pm in over a month. It's kind of wierd doing this while the sun is actually up!!!) Happy Friday everyone!!!

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Darin "Sid" Cameron spent 15 years working in the technology industry which in 1998 relocated him to St. Louis. In 2004 he took over web development tasks for Kimberly's real estate team and later became the full-time Marketing and Operations Director in 2005. In 2011 Sid launched two brokerages, The Realty Store, Inc. and Realty Referral Partners, Inc, while continuing to perform marketing and operations for Kimberly's team. Sid holds a real estate broker's license in Missouri, CRS certification and was the first CyberStar in the St. Louis area.
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