Is an Adjustable-Rate Mortgage Right for you?

shutterstock_66464719

Is an Adjustable-Rate Mortgage right for you?

 

When you shop for a mortgage, whether it’s for a new home or a refinance, you’ll soon hear about adjustable-rate mortgages (ARMs). For some, an adjustable-rate mortgage is an automatic no. If that is the case, it is usually for one of three reasons:

  • They’re uncomfortable with any risk;
  • They’re unaware of just how an ARM works;
  • They can predict the future with relative certainty.

While ARMs definitely have their advantages, make sure you understand them before getting into one.

 

How ARMs work

All ARMs start out as fixed-rate mortgages for the first 3, 5, 7, or 10 years. An ARM will appear like this, where the first number in the terms “3/1,” “5/1”, or “7/1” denotes the number of years that the rate will be fixed. Usually the lower the number is, the lower the initial rate. During the fixed period, there is no risk and typically a healthy savings. The second number shows how many years before the rates can be adjusted once that fixed period has expired.

After this fixed period, the rate can fluctuate. The rate itself is made up of both fixed- and variable-rate components. The variable component will be based on some index such as Treasury bonds. This is added to the fixed-rate component set by the lender when you determine your starting rate.

Your decision to obtain an ARM should be based on how long you plan to live in this home. Having reasonable expectations for future sale or refinancing is all it can take to make an ARM worth considering. If you believe that you could be living there for a long time, you may want to consider opting for a fixed-rate mortgage. The reason? If you have an ARM and have to refinance at some time in the future when rates are higher, you might find yourself in a fixed-rate mortgage with a much higher rate.

 

Inside Information

Lenders give you a discounted rate up front because they know the rate will float with the market later on. If you sell your home or refinance again prior to that happening, it’s their loss. You have the advantage here because you control the timing of your next step.

 

Managed Risk

One way to prepare for the possibility of a higher rate and payment later is to pay extra principal each month to reduce your balance faster. If the rate ultimately adjusts up, your balance will be lower and the payment change will be less as a result. As well, you would already be accustomed to paying more.

 

The Bottom Line

A fixed-rate loan provides the certainty that it will never change. An ARM provides a guaranteed savings but for a limited period of time. The best way to decide is to balance your expectations for using any particular loan with the peace of mind that can come from being assured of stability, even if your timeframe changes.

 

ABOUT INLANTA MORTGAGE

Headquartered in Pewaukee, Wis., Inlanta Mortgage was established in 1993. The company has grown to 35 branches in 16 states and over 240 employees. Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as jumbo and portfolio programs. The company is an agency approved lender for Freddie Mac, Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs.

In 2016, Inlanta Mortgage was recently named a Top Workplace for a third consecutive year. Inlanta has been recognized as a Top Mortgage Employer by National Mortgage Professional and a Top 100 Mortgage Banking Company and 100 Best Mortgage Companies to Work For by Mortgage Executive Magazine. Inlanta has also received the Platinum Million Dollar USDA Lender Award.

PARTNERSHIP OPPORTUNITIES

Inlanta Mortgage continues to expand its branch network and encourages ethical lending professionals to learn more about our support platform and discover how an Inlanta branch partnership with Inlanta Mortgage is essential to long-term success.

Locate an Inlanta Mortgage loan officer at www.inlanta.com/locations. For current employment opportunities, visit www.inlanta.com/join-our-team/employment-opportunities. Learn more about Inlanta Mortgage branch partnership opportunities at www.inlantapartners.com, call 262-439-4260, or email partners@inlanta.com.

Inlanta Mortgage, Inc. NMLS #1016.

Mortgage Rates Rebound Higher

Mortgage Rates Rebound
 

Fixed Mortgage Rates Rebound

Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®) today, showing average fixed mortgage rates moving higher for the first time in three weeks amid more positive economic data out of the manufacturing and non-manufacturing sectors.

30-Year Fixed Rate Mortgages

According to Freddie Mac’s Primary Mortgage Market Survey® (PMMS®) average 30-year fixed rate mortgages rose to 4.16 percent from 4.10 percent last week. A year ago at this time, the 30-year FRM averaged 3.40 percent.

15-Year Fixed Rate Mortgages

The average 15-year fixed rate mortgage rose to 3.27 percent from 3.20 percent last week. A year ago at this time, the 15-year FRM averaged 2.61 percent.

5-Year Adjustable Rate Mortgages

The average five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) stayed at 2.96 percent. A year ago, the 5-year ARM averaged 2.73 percent.

1-Year Adjustable Rate Mortgages

The average one-year Treasury-indexed ARM fell to 2.61 percent from 2.64 last week. At this time last year, the 1-year ARM averaged 2.59 percent.

These low mortgage rates continue to assist with the housing market recovery. Contact a licensed mortgage loan professional to take advantage of low mortgage rates. Find a loan officer near you or apply online for a mortgage loan and we will redirect your application to a qualified loan professional near you. Ask an Inlanta Mortgage loan officer about our Lock & Shop program if you are worried about rising rates and want to lock in your mortgage rate now!

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac:

“Fixed mortgage rates rebounded slightly this week on more positive economic data releases. Production in the manufacturing industry expanded for the fifth month in a row in October to the strongest pace since April 2011. Similarly, the non-manufacturing sector grew for the second consecutive month in October and beat the market consensus forecast of a decline. These increases were widespread across the nation, from Chicago to Milwaukee to New York.”

Original Source: Freddie Mac interest rates listed above are national averages as reported by Freddie Mac. Individual interest rates are dependent upon credit approval and may include points. Average mortgage points are also reported in Freddie Mac’s Primary Mortgage Market Survey. Other mortgage financing fees may apply. Contact your lender for detailed information.

Want to Lock & Shop?

The Inlanta Lock & Shop is a loan program designed for home buyers who haven’t found a property but want to lock in while interest rates are historically low. This program is especially appealing to home buyers interested in locking in at mortgage rates that before they rebound any higher!

Our Mission Statement

Our mission is to be the home financing partner that you trust to serve your family, friends and community. Through our family of dedicated mortgage professionals our commitment is to deliver an exceptional experience. Our unwavering dedication to integrity, honesty and ethics is the foundation of all of our relationships.

About Inlanta Mortgage – Celebrating 20 Years

Celebrating its 20th Anniversary, Inlanta Mortgage is a growing mortgage banking firm committed to quality mortgage lending, ethical operations and strong customer service.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is an agency approved lender for Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin NMLS #1016. Inlanta Mortgage was named a Top Mortgage Lender in 2012 by Scotsman Guide and has been listed on Mortgage Technology’s Top 25 Tech Savvy Lenders List for the last four years. Inlanta has also been named to the Milwaukee Business Journal’s “Top 25 Largest Milwaukee-Area Mortgage Banking Companies” and Mortgage Executive Magazine’s “Top 100 Mortgage Companies in America” in 2011 and 2012. In addition, Inlanta was named a “Fastest Growing Firm” by Milwaukee Business Journal in 2013 and a “Platinum Million Dollar Lender” by the USDA Rural Development Program.

Fixed Mortgage Rates Rise Again

Fixed Mortgage Rates Increase for Third Straight Week

Fixed Mortgage Rates Increase for Fourth Week in a Row

30-Year Fixed Rate Mortgages

Average 30-year fixed rate mortgages increased this week following other long term yields. According to Freddie Mac’s Primary Mortgage Market Survey (PMMS) for the week ending August 23, 2012,  the 30-year fixed-rate mortgage (FRM) averaged 3.66 percent – up from last week when it averaged 3.62 percent. Last year at this time the 30-year FRM averaged 4.22 percent.

15-Year Fixed Rate Mortgages

The 15-year fixed rate mortgage also increased. The 15-year fixed rate mortgage averaged 2.89 percent for the week – up slightly from 2.88 percent. Last year at this time, the 15-year FRM averaged 3.44 percent.

5-Year Adjustable Rate Mortgages

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) increased to 2.80 percent – up from last week when it averaged 2.76 percent.  A year ago, the 5-year ARM averaged 3.07 percent.

1-Year Adjustable Rate Mortgages

The one-year Treasury-indexed ARM averaged 2.66 percent, down from last week when it averaged 2.69  percent. Last year at  this time, the 1-year ARM averaged 2.93 percent.

Contact a licensed mortgage loan professional to take advantage of these historically low mortgage rates. Find an Inlanta Mortgage professional near you.

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac:

“Fixed mortgage rates inched upward this week along with other long-term yields. The Census Bureau reported that residential building permits were up in July, although builders slowed the pace of construction starts on one-family homes in July to the least since March while apartment and condominium building picked up to the most since April. Existing home sales rose in July from June’s eight-month low and the median sales price jumped 9.4 percent from a year earlier, representing the largest 12-month gain since January 2006. The price gain was broad-based, with annual increases registered in all four regions of the U.S. and led by a 24.5 percent increase in the West.”

Original Source: Freddie Mac Interest rates listed above are national averages as reported by Freddie Mac. Individual interest rates are dependent upon credit approval and may include points. Average mortgage points are also reported in Freddie Mac’s Primary Mortgage Market Survey. Other mortgage financing fees may apply. Contact your lender for detailed information.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products,  as well as a full suite of jumbo and portfolio programs. The company is  fully delegated HUD-FHA including FHA 203K, VA, and USDA approved.  Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage is proud to be a recent recipient of a 2012 Top Workplace Award.

 

Mortgage Rates Hold Steady at Record Lows

Mortgage Rates Hold Steady at Record Lows

30-Year Fixed Rate Mortgages

30-year fixed rate mortgages hit a new all-time record low. According to Freddie Mac’s Primary Mortgage Market Survey (PMMS) the 30-year fixed-rate mortgage (FRM) averaged 3.78 percent for the week ending May 24, 2012 – down from last week when it averaged 3.79 percent. Last year at this time, the 30-year fixed rate mortgage averaged 4.60 percent.

15-Year Fixed Rate Mortgages

The 15-year FRM held steady at record low of 3.04 percent.  A year ago at this time, the 15-year FRM averaged 3.78 percent.

5-Year Adjustable Rate Mortgages

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.83 percent – unchanged from last week. Last year at this time, the five-year ARM averaged 3.41 percent.

1-Year Adjustable Rate Mortgages

Also this week, the one-year Treasury-indexed ARM is down to 2.75 percent from 2.78 percent last week.  At this time last year, the one-year ARM averaged 3.11 percent.

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac:

“Mortgage rates were virtually unchanged this week with fixed-rate loans remaining at record lows and helping to drive homebuyer affordability. The National Association of Realtor’s Housing Affordability Index reached an all-time record high in the first quarter of this year since records began in 1970. In April, existing home sales rose to the highest rate since January with an annualized rate of 4.62 million homes with purchases increasing in all four Census Regions. Similarly, sales of new homes also rose last month, beating the market consensus forecast. In addition, the Federal Housing Finance Agency purchase-only house price index rose 0.4 between the first quarter of 2011 and 2012 and represented the first 4-quarter increase since the first quarter of 2007.”

Contact a licensed mortgage loan professional to take advantage of these historically low mortgage rates. Find an Inlanta Mortgage professional near you.

Original Source: Freddie Mac

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage has recently earned the distinction of being named a 2012 Top Workplace in Southeastern Wisconsin.

Mortgage Rates

Mortgage Rates

30 Year Fixed Rate Mortgages

According to Freddie Mac’s Primary Mortgage Market Survey (PMMS) the 30-year fixed-rate mortgage (FRM) averaged 3.88% percent for the week ending April 26, 2012 – down (slightly) from last week when it averaged 3.90% percent. The 30-year fixed rate mortgage has been below 4% for all but one week in 2012.

15 Year Fixed Rate Mortgages

The 15-year FRM averaged 3.12 percent for the week – down (slightly) from last week when it averaged 3.13 percent. A year ago at this time, the 15-year FRM averaged 3.97 percent.

5-Year Adjustable-Rate Mortgages

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.85 percent for the week – up from last week when it averages 2.78 percent. Last year at this time, the five-year ARM averaged 3.51 percent. Also this week, the one-year Treasury-indexed ARM is down to 2.74 percent from 2.81 percent last week.  At this time last year, the one-year ARM averaged 3.15 percent.

Vice President and Chief Economist of Freddie Mac, Frank Nothaft was quoted as saying, “Fixed mortgage rates held near record lows this week as the markets waited for the Federal Reserve’s (Fed) April 25th monetary policy announcement following two days of deliberations. The Fed stated that it expects economic growth to remain moderate and then pick up gradually. In addition, it noted that labor market conditions have improved in recent months and it anticipates the unemployment rate will decline gradually.”

Nothaft also said, “The housing market has also shown some improvement as well. The Federal Housing Finance Agency’s purchase-only house price index rose at a monthly rate of 0.3 percent in February. Moreover, 12 out of 20 metropolitan areas experienced increases over the month, according to the S&P/Case-Shiller® 20-city indexes, led by a 2.1 percent gain in Phoenix. New home sales in March were stronger than the consensus market forecast and February’s sales were revised upwards to the strongest pace in almost two years. However, the Fed’s statement warned that despite some signs of improvement, the housing sector still remains depressed.”

Original Source: Freddie Mac

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016.