The Fixed Rate Mortgage and Adjustable Mortgage Rate Face-off

There is more involved in qualifying for a low mortgage rate. Aside from an American maintaining a solid credit history, other factors play a key role in how high or low interests rates can soar or plummet. As long as the indices of the treasury continue to fluctuate, low mortgage rates will continue to linger. Subsequently, completing the loan application process during the uncertain times of the stock market is the perfect time to expedite any last minute mortgage decisions.

For the prospective homebuyer challenged by cash reserves, the cyclical patterns of the stock market can provide a wealth of low interest rates. Minimizing an interest rate by a point, a single basis point or by a thousand dollars can be the difference in closing costs. New homeowners are the only consumers who can benefit, either.

For both the current homeowner and homeowner-hopeful in quest of reducing their home loan to a low mortgage rate, refinancing is ripe during the stock market’s turbulence. Over the course of the last years, Primary Mortgage Market Surveys demonstrate that the 30-year, fixed-rate mortgage (FRM) has averaged 5.69 percent.

If the current fixed rate mortgage is not low enough to suit a consumer’s home loan needs, the one-year treasury-indexed adjustable-rate mortgages (ARMs) are averaging at a rate of 4.02 percent. Although the adjustable-rate mortgages (ARMs) are not as stable as a fixed rate mortgage, it provides a borrower the opportunity to qualify for a reasonable to low mortgage rate without the out-of pocket expense.

Once treasury bond yields are elevated, long-term mortgage rates will begin to edge upward. However, locking in a fixed rate mortgage (FRM) may be the better decision over settling for the low mortgage rate doubling as an ARM.