Every week, Freddie Mac releases a report on the average interest rate for the previous week on 30 year and 15 year fixed-rate mortgages as well as 5 year and 1 year adjustable rate mortgages. It is called the Primary Mortgage Market Survey®. The most recent Freddie Mac report showed that, after weeks of continually falling, interest rates on Southern Maryland homes as well as those around the country have started to head upwards.
Last week's 30 year fixed-rate mortgage loan was up slightly to 3.55% from the previous week's 3.49%. The same was true for 15 year fixed-rate mortgages. They were slightly up to 2.83% from 2.8% the previous week. With the exception of just one week this year, interest rates for 30 year FRMs have been below 4%. Incredibly, this also marks the 10th week in a row that 15 year FRM interest rates have ended up below 3%.
If you are considering buying a Southern Maryland home, you need to act on these low interest rates now. When you find that perfect home and apply for financing, you may want to consider your options. Unlike years past, the 30 year adjustable rate mortgage isn't the only affordable option to get you into that home. A 30 year FRM is much better than a 30 year ARM because it keeps your payment at a consistent level for the entire life of the loan. An adjustable rate means that it starts off lower, but will increase, depending on the mortgage rate available at the time.
Once you've decided that an FRM will work for your Southern Maryland home purchase, you need to think about the length of the loan. Now that interest rates are so low, a 15 year FRM is a much more economically sound mortgage decision than the 30 year FRM. Let me put this in simple terms. You have found the perfect Southern Maryland home. You need to finance $200,000 with a fixed-rate loan. The monthly mortgage payment with a 30 year FRM will cost you $904/month while a 15 year FRM will cost you $1365/month. Yes, you have to pay a little more each month for the 15 year FRM. But, consider this...the interest you pay at the end of the 15 year FRM totals $45,677. The interest rate you will have paid at the end of a 30 year FRM will be $125,325. That is almost three times the interest and will take twice as long to pay off. Amazing!
Even though interest rates have begun to rise, it is still a great time to purchase a Southern Maryland home. With rates below 4% and 3%, you can't afford NOT to take advantage of a 30 or 15 year FRM. Just let me know when you're ready to look for your dream Southern Maryland home.
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