Current Mortgage Rates

Monday, October 13, 2008



If you need money quickly, at a low interest rate an equity loan may be your best or only option. One of the best parts about an equity loan is that you can typically get a larger amount of money, for a low interest rate with incredibly low monthly payments. This is because your payments on an equity line are based on interest rather than on the principal of the loan you have borrowed. This is not to say you should squander the proceeds from your equity loan, but if you need money quickly and you don't have a ton of budget flexibility to make large payments towards your loan an equity line may be just the ticket. Rates on home equity loans are at an all time low. Lenders are more willing than ever to give out home equity loans for very little interest. This if for very good reason as one's house is being put as the security in the deal. For homeowners who are in need of cash, a wisely used home equity loan can be the best way to get out of debt and handle money issues. However, before taking a home equity loan it is wise to be sure that a couple qualifications are met:
  1. Substantial savings are preferred to have some security for yourself in case you start getting behind in payments;
  2. A well paying, secure job is required;
  3. For the above two reasons, it is recommended that young homeowners look elsewhere prior to taking this form of loan and putting their home at risk.
Here are some home equity loan traps:
  • Not paying it back on time: If you get into trouble by borrowing from a friend or family member, you risk losing a valuable relationship. If you borrow from a bank or credit card company, you might damage your credit rating or need to declare bankruptcy. If you default on your home equity loan, you may lose your home.
  • Prepayment penalties spoil the party: Home equity loans often offer low closing costs and cheap initial interest rates. But if your loan includes prepayment penalties, you might be punished for paying off your debts in a quick and responsible fashion. For instance, if you decide to pay off your loan before the introductory interest rate adjusts higher, your lender might impose a hefty fee.
  • Lenders who are too easy can make your life too hard: If your lender encourages you to borrow 120 percent more than the value of your home, you might think that you just hit the jackpot. But before you sign on the dotted line, think this through carefully. It's often dangerous to borrow more than you can reasonably afford to repay. If you borrow more than your house is worth in order to pay off those nagging credit card bills, it won't make your problems go away, and may even make them worse.



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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed6.25%
30-yr. fixed jumbo7.62%
15-yr. fixed5.88%
15-yr. fixed jumbo7.12%
7/1 ARM6.62%
5/1 ARM6.38%
3/1 ARM6.25%
1-yr. ARM5.88%
1-yr. LIBOR ARM6.25%
10/1 ARM8.38%
40-yr. fixed7.12%
*Mortgage Rates Updated: 10/12/2008