Current Mortgage Rates

Saturday, November 21, 2009



Government Loans:

* Jumbo Loan Programs: A jumbo mortgage is a mortgage loan which is larger than the limits set by Fannie Mae and Freddie Mac ($252,700 as of 1/1/2000). Since these two agencies will not purchase these types of loans, they usually carry a higher interest rate (to enhance their value and marketability to investors).

*FHA Loan Programs: An FHA mortgage loan is insured by the Federal Housing Administration(a division of the Department of Housing and Urban Development (HUD)). Although mortgage lenders provide the mortgage funds, the FHA sets underwriting standards for approving applicants. In many cases, FHA underwriting guidelines are more lenient than conventional (not government insured or guaranteed) underwriting guidelines. This leniency makes it easier for borrowers to qualify for a mortgage loan (low down payment requirements and a higher monthly debt allowance). FHA limits the types of loan programs it insures, but it will insure the more popular 30 year fixed, 15 year fixed and one year adjustable loan programs. However, borrowers are limited to the amount that they can borrow using an FHA-insured mortgage. Applicable loan limits differ by county, so contact your local HUD office for specifics. Fixed Rate Loans:

* 30 Year Fixed Rate Program: 30 year fixed mortgage is a type of mortgage loan that is repaid by the borrower making 360 equal monthly payments over a period of 30 years. Since the borrower's payments are 'fixed', the borrower can expect to make the same monthly payment for the entire term of the loan. A 30 year mortgage loan is the most widely accepted program used to finance a residential purchase, and is available for conventional, jumbo, FHA and VA loans.

* 15 Year Fixed Rate Program: 15 year fixed mortgage is a type of mortgage loan that is repaid by the borrower making 180 equal monthly payments over a period of 15 years. Since the borrower's payments are 'fixed', the borrower can expect to make the same monthly payment for the entire term of the loan. A 15 year mortgage loan is the most widely accepted program used to finance a residential purchase, and is available for conventional, jumbo, FHA and VA loans.


Adjustable Rate Loans (ARM's): These are loans that have a rate which can adjust throughout the course of the loan's repayment, depending upon the movement of a specified Index. One example of a commonly use index is the one-year Treasury Bill. ARM programs may initially offer a lower interest rate than a fixed-rate mortgage. This makes them attractive to people who, by taking the lower initial interest rate, qualify for a larger mortgage. People who may benefit by choosing an ARM program are people planning on moving or refinancing within the first 5 years, people with a high probability of increasing their income, and people who need a low initial interest rate in order to qualify for their mortgage.

Before applying for an ARM, be sure to ask about the interest rate caps. Arms typically have 2 'caps', or limits, on how high or low the interest rate can adjust which also effects how high or low the mortgage payment adjusts. One cap sets the most that your interest rate can go up or down during each adjustment period. The other cap sets the most your interest rate can go up or down during the entire life of the loan. Caps of 2% per adjustment and 6% over the life of the loan are extremely common. For example, if your loan starts at 5%, and the per-adjustment cap is 2%, your interest rate for that adjustment period cannot go higher than 7%. You also know that the interest rate cannot go higher than 11% over the life of the loan. You need to take into consideration what your comfort level would be if you were to have to make a mortgage payment at the highest adjustment sometime in the future. Blended loans: Blenden loans allow borrowers to spilt their home loan into a partly fixed and variable portions. This provides borrowers with the flexibility of a variable rate product and added certainty of a fixed rate loan.




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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed4.75%
30-yr. fixed jumbo5.25%
15-yr. fixed4.25%
15-yr. fixed jumbo4.75%
7/1 ARM4.38%
5/1 ARM4.00%
3/1 ARM4.00%
1-yr. ARM3.75%
1-yr. LIBOR ARM4.38%
10/1 ARM4.62%
*Mortgage Rates Updated: 11/21/2009