Rate Watch: January 21, 2009

January 21, 2009 by admin
Filed under: Mortgage articles

These days you cannot help but hear about our economy. Foreclosures and unempolyment are up and spending is down. Right now we are in an economic storm.

Believe it or not, some good has come out of this storm. Around the end of November the fed cut interest rates. This is great news for first time home buyers or folks trying to save money in the long run by refinancing their current loan to a lower rate.

Interest Rates fluctuate day to day and even hour to hour. To ensure that you’re able to get the best rate for financing a new home purchase or refinancing a current home; Lone Star Financing is going to regularly post a few common loan scenarios.

Here are some common scenario’s with today’s current rates:

Scenario 1: Purchasing a new home

Mike and Cindy were recently married and have been renting an apartment for the past 2 years. They have been looking into buying their first home together and feel that this is a great time to buy. Today they found a house that both of them asbolutely love within their price range. The house is listed at $200,000 and they are able to put 20% down.

Here’s a look at two rate scenarios based on the information provided above with two different credit scores:
Credit Score: 680
Sale Amount: $200,000.00
Down Payment: $40,000.00
Loan Amount: $160,000.00
30 yr Rate: 5.500% *APR: 5.672%
15 yr Rate: 4.750% *APR: 5.037%

Credit Score: 740+
Sale Amount: $200,000.00
Down Payment: $40,000.00
Loan Amount: $160,000.00
30 yr Rate: 4.875% *APR: 5.041%
15 yr Rate: 4.750% *APR: 5.037%

Scenario 2: Rate/Term Refinance

Bob and Cheryl have been in their home for 5 years now and are paying 6.5% interest on current mortgage loan. They would like to refinace their mortgage by doing a rate and term refinace loan. The appraised value of their house is $200,000.

Here’s a look at two rate scenarios based on the information provided above with two different credit scores:
Credit Score: 680
Appraised Value: $200,000.00
Loan Amount: $160,000.00
30 yr Rate: 5.500% *APR: 5.672%
15 yr Rate: 4.750% *APR: 5.037%

Credit Score: 740+
Appraised Value: $200,000.00
Loan Amount: $160,000.00
30 yr Rate: 4.875% *APR: 5.041%
15 yr Rate: 4.750% *APR: 5.037%

Scenario 3: Cash-out Refinance

Frank wants to start up his own business. He would like to use the equity in his property to do a cash-out refinance and get a rate lower then his current mortgage loan. His house is appraised at $200,000.00.

Here’s a look at two rate scenarios based on the information provided above with two different credit scores:
Credit Score: 680
Appraised Value: $200,000.00
Loan Amount: $160,000.00
30 yr Rate: 6.500% *APR: 6.683%
15 yr Rate: 5.250% *APR: 5.541%

Credit Score: 740+
Appraised Value: $200,000.00
Loan Amount: $160,000.00
30 yr Rate: 4.875% *APR: 5.041%
15 yr Rate: 5.000% *APR: 5.289%

These are just a few scenarios. Please check back with us regularly as we will be updating rates so you can see what the current rates are and decide if this is a good time to finance or refinace your home.

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