Rates low despite plunging home sales

September 6, 2011 7:10:38 PM PDT
If you're looking to buy or refinance a home, now is a great time to do it, with rates the best they've been in decades.

However, they're not expected to last for long.

Like many homeowners, Kevin Ternan is shopping for a new home loan, an effort to capitalize on low interest rates while they last.

"I currently have an adjustable rate mortgage and I've got a feeling that at some point here in the future, that's going to adjust upward and I like the fixed rates. They're very low. So, I figure it's time to take advantage," he says.

Though home sales have plunged in recent months, mortgage brokers in the Bay Area have been plenty busy moving people out of one loan and into another. According to the Wall Street Journal, last week's lowest advertised rate for a 30-year fixed was 3.75 percent, but the average rate was 4.39 percent.

Though not as low as some advertised rates, mortgage banker Eric Rotner says his clients are getting loans that will save them tens of thousands of dollars in the long run.

"15-year loans are well into the low 3s, 3 1/4, 3 3/8, in that neighborhood. 30-year loans are in the low 4s. This is for loans that $417,000 or less. As you go above $417,000 into the high-balance conventional spectrum, they're in the mid-4s for a 30-year fixed," he explained.

According to mortgage bankers, even those seeking so-called "jumbo loans" are benefitting in this market, that is, loans in excess of $729,000. Depending on the borrowers' qualifications, interest rates on a 30-year fixed jumbo can be found in the upper 4 to lower 5 percent range.


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