Current Mortgage Rates

Saturday, September 06, 2008



Avoid lenders who call you and promise guaranteed, low-interest loans, who take applications over the phone, or who offer next-day approval if you pay them some money today. Say No to lenders who ask for up-front fees to cover the first payment and other expenses. Why? Because they never intend to give you the actual loan - they just take the up-front money and run. Whenever you borrow money, don't sign anything you don't fully understand. Always assume that any paper you sign is a contract. You can insist on changing anything in a contract that you don't like or can't agree to. If the lender won't change the contract to your satisfaction, get a loan somewhere else.

Some predatory lenders dramatically change the loan terms at the last minute from what you thought you were promised. Before you sign the loan papers, ask a lawyer or trusted friend to go over them with you. don't sign a document with blank spaces; all spaces should be filled in before you sign.
Possible warning signs of a predatory loan:
  • It sounds too easy: "Guaranteed approval" or "no income verification" sometimes indicate that the lender doesn't care whether you can afford to make the payments over the long haul.
  • Excessive fees: Make sure fees are typical of those in your market. Because these costs can be financed as part of the loan, they are easy to disguise or downplay. On competitive loans, fees are negotiable. It is common for home buyers to pay only one percent of the loan amount for prime loans. By contrast, a typical predatory loan may cost five percent or more.
  • Large future costs: High-risk adjustable rate mortgages with payments that rise substantially after a short introductory period are seldom appropriate for families who already have had problems repaying other loans. Home buyers should also avoid a large, single "balloon" payment (a lump sum due at the end of the loan's term).
  • Closing delays: A lender who deliberately delays the closing may be waiting for the commitment on a reasonably-priced loan to expire.
  • Over-valued property: Inflated appraisals can allow for excessive fees to be included in the loan, resulting in the borrower owing more to the bank than the home is worth.
  • Barriers to refinancing: Prepayment penalties can make it hard for borrowers to refinance and take advantage of a lower-cost loans.
  • No down payment loans: These loans may be split into two mortgages, with one having a much higher cost. Home buyers should be sure they can afford the payments.
  • Unethical document management: An ethical lender or broker will always require you to sign key loan papers, and they will never ask you to sign a document dated before the date you sign it.



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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed6.38%
30-yr. fixed jumbo7.00%
15-yr. fixed5.88%
15-yr. fixed jumbo6.50%
7/1 ARM6.25%
5/1 ARM6.00%
3/1 ARM5.88%
1-yr. ARM6.00%
1-yr. LIBOR ARM5.50%
10/1 ARM7.88%
*Mortgage Rates Updated: 09/04/2008