10/13/2005

Rates poised to rise through 2006

As rates rise, so does your monthly payment. The 30-year fixed could rise as predicted to 6.7 percent by the end of 2006, as energy prices change the inflation picture. First time buyers will feel the pinch first, as they look to 0% down and low down payment products. The non-traditional mortages will become more difficult to obtain as rates rise. This rise in interest rates is and has been abnormally low for the present business cycle, and is seen as a correction. So if you're looking at a national median price home of $219,400 (remember, I said "national", not "California"), with a 30-year mortgage at the current average of 5.98 percent, a home buyer would have to make monthly payments of $1,312. At a mortgage rate of 6.5 percent, that figure rises to $1,387 a month. See more about this here.

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