Home Mortgage Rates Near 60 Year Low

Buying a home now could save you thousands.

The interest rate on 30-year home mortgages continues to drop, falling to an average of 4.32 percent according to Bankrate.com. [1] That also means that some lenders are writing loans for under 4 percent, even closer to 3 percent for some 15-year loans.

Generational Low Rates

As of September 2011, mortgage interest rates have fallen to the lowest rates seen in nearly 60 years, rivaling some of the lowest rates seen in the past several years. The sinking rates has everyone from mortgage brokers to real estate agents urging people to buy a home reports ABC News Money. However, that’s still a big challenge for many consumers who are battling high unemployment, stagnant wages, credit problems and related financial problems. [2]

Driving interest rates lower are events happening far beyond our borders, namely in Europe where debt market concerns continue to cast a pall over the global economy. The updated mortgage information came on September 15th that was the third anniversary of the Lehman Brothers collapse, which sparked the economic crisis that spread across the globe soon thereafter. Three years later unemployment in the United States remains about 9 percent, America is deeply in debt and no solutions appear on the horizon.

Previous Low Rates

Unless consumers are able to buy, both financially and with confidence, lower home loan rates will not do much good except for the people who were planning to buy anyway.

Beginning in 1950 and lasting into 1951, interest rates on FHA-backed loans were at 4.08 percent, among the lowest rates seen in the post-World War II period. Over the ensuring years, rates have swung up and down, reaching the high teens at various times in the 1970s and 1980s, before dipping to today’s current low levels.

Refinancing Bargains Abound

Homeowners who have the means to refinance will find some loan bargains too. Rates on loans for 15 years or less are at 3.5 percent or lower, with some adjustable rate mortgages now at 3 percent.

If you’re looking to buy a home, there are a few things to do first including checking your credit reports to ensure that no mistakes are present. If there are mistakes, fix these problems first before applying for credit. Also, your total debt, including your mortgage should not exceed 45 percent of your gross income.

References

[1] Bankrate.com: Mortgage Rates Drop to Another Record Low; Polyana da Costa; September 15, 2011

[2] ABC News Money: How to Take Advantage of Record Fixed-Rate Mortgage Lows; Susanna Kim; September 16, 2011

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