page 1 | 2
The mortgage industry is in turmoil.
Everyday brings new revelations about soaring foreclosure rates, billion-dollar losses and lenders shutting down, leaving borrowers in the lurch and thousands out of work.
Yet, through it all, interest rates remain surprisingly affordable.
After peaking in mid-July, the cost of most fixed-rate and adjustable-rate mortgages (ARMs) has fallen back towards the very reasonable loans we enjoyed last fall and winter.
With the average rate for a 30-year, fixed-rate loan below 6.75% the past two weeks, we’re only paying about a quarter-point more than we did before the current crisis began.
The only exception has been jumbo loans – the fixed-rate mortgages for more than $417,000. They’ve continued to get more expensive and now cost well over 7%.
If you’re in the market for a mortgage, here’s what you need to know about the current crisis:
Banks and finance companies obtain most of the money they loan for mortgages from two government-chartered companies – commonly referred to as Freddie Mac and Fannie Mae – or large private investors such as retirement plans, mutual funds and insurers.
page 1 | 2
|
