Are you preparing to buy a home for the first time? Or have you closed on a number of homes in the past and are preparing to buy your next home? Regardless, you'll want to keep in mind the steps necessary to successfully navigate the preparations for buying that next home.

Initially, you'll want to determine your income, debts and savings and decide what you can afford. Instead of doing all the calculations and attempting to make the determinations yourself, you may want to decide on a reputable lender and have them do it for you through a prequalification. If you know that you will not be accumulating any further debt, the prequalification will tell you how much you will be able to loan for your next home.

A word to the wise, however, is that you may want to consider buying a home that is 10 percent less than what you are prequalified for. It will give you more wiggle room for future unforeseen purchases.

Finding a lender is easy. They can be located throughout the Internet, in the Yellow Pages, at mortgage brokerages and in banking and financial institutions. Finding a good lender, though, may not be as easy.

You'll want to find a reputable lender who can give you the best deal and you'll want to find a loan that meets your needs, preferably one that has a low interest rate and relatively low monthly payments.

If you've used a lender to buy a home in the past that you trust, you may want to start there. For a broader selection of lenders, however, comb through the Internet for sites that display the Better Business Bureau (BBB) or other accreditations. Also, talk to friends and family about lenders they have successfully used in the past. You might want to consider a mortgage broker over a banking institution. They have a access to a variety of lenders who offer a variety of options.

Pick ten lenders total to inquire about a home loan. Ask about different loans available and which ones might work best for you. Depending on your buying situation and the number of years you intend on owning the home, you may want to consider an adjustable rate mortgage (ARM) or balloon loan with a refinancing option as opposed to a traditional fixed-rate mortgage.

When you decide on the loan type, get a quote for interest rates, APRs and all fees associated with the loan from each lender, and request that they send the quotes to you in writing. Make sure when you request the interest rate that you ask how long the rate is good for (through what date).

Try to obtain all this information within a week's time, so that interest rates don't fluctuate too much. They actually can from day-to-day, depending on trading market activity.

Once you find a lender and know how much you will be able to loan, you'll need to find a home to buy. You probably already have in mind what you want in your next home. A licensed realtor, however, has access to a variety of resources to enable you to most successfully find your next dream home.

Inquire of friends and family in order to find a reputable realtor. If no one knows of one, look in the local phone book and pick out three different realty companies to contact. You'll want to either ask for the realtor with the most closings or for the realtor who has just been licensed.

Many people suggest that you use the realtor with the most closings, because they experience the highest rate of success in sales. New agents, however, can be just as valuable, since they are hungry for a sale and will often go beyond the call of duty, even beyond that of those who are very experienced, in order to sell your home.

Use your intuition in deciding on realtors to interview in person. Put together a short questionnaire that you ask of each when you initially speak to them over the phone. You'll want to ask each of them for two references of people who have used them in the past.

Some questions you might want to ask of experienced realtors in your phone interview are:

* How many homes have you listed versus how many you have sold in my subdivision, neighborhood or city (whichever are applicable) in the last year, or the past (whichever is most relevant)?
* What types of advertising do you use to promote the sale of homes you list - multiple listing service (MLS), flyers in tubes at the curb of the home, newspaper advertising or other media outlets, agent open houses, public open house, etc.?
* How many homes do you have listed currently on the market in my subdivision, neighborhood or city?
* Do you have any marketing materials?
* Do you have any additional accreditations? If so, which ones?
* Will you be my only point of contact or do you have others who would be assisting me through the process?
* What commission do you charge? Some can vary as much as 2 percent.

Questions for new realtors may be as follows:

* What did you do as a profession before you became a licensed realtor?
* How did you approach your previous profession in order to be a success?
* What will your plan be to sell my home?
* What types of advertising will you use to promote the sale of my home - multiple listing service (MLS), flyers in tubes at the curb of the home, newspaper advertising, agent open houses, public open house, etc.?
* How are you building your reputation as a new realtor?
* Do you have any marketing materials you can provide to me?
* Do you have any additional accreditations? Is so, which ones?
* Will you be my only point of contact or do you have others who would be assisting me through the process?
* What commission do you charge? Some can vary as much as 2 percent.

Some of the items you request over the initial phone interview may have to be provided when you meet face-to-face. For the in-person meeting, however, you'll want to include the following questions:

* Do you update your clients regularly regardless of whether there is new information to provide? If so, at what regular intervals?
* What is your marketing strategy to sell my home?

You may think of other questions that are pertinent to your situation. Jot them down before the interview and don't finalize the interview until all your questions have been answered.

After the interviews are completed, compare commission and responses of each. Decide on which licensed realtor you'll use, and you'll be well on your way to obtaining your next home purchase.

Ki maintains a website, which works as a clearinghouse of information on Austin real estate. There, future homeowners can search the Austin MLS. Ki has worked with Austin buyers for over three years. He also provides up to date information on mortgage rate trends on his site.

While the expectation has been that mortgage rates would start to rise they have fallen for the last 2 weeks. This week the 30 year rate fell from 4.98 to 4.91 (last week it fell from 5.03 to 4.98). Besides October 8th its the lowest rate we have seen since the start of the summer. So how does 4.91 fit in with historical mortgage rates. Its lower than any point before March 26, 2009. Its also the 11th lowest recorded rate in history (all of the 10 lower recorded rates occured in 2009).

While the 30 year mortgage rate is the most watched rate the other 3 major mortgage products fell as well. The 15 year rate fell from 4.40 to 4.36. The 5 and 1 year arm fell from 4.35 to 4.29 and 4.47 to 4.46. The 1 year arm is now higher than the 5 year arm and the 15 year arm. Below are rates from the weeks from Nov 12th, 2009 to October 15th, 2009.

Nov 12, 2009
30-yr 4.91 15-yr 4.36 5-yr ARM 4.29 1-yr ARM 4.46

Nov 05, 2009
30-yr 4.98 15-yr 4.40 5-yr ARM 4.35 1-yr ARM 4.47

Oct 29, 2009
30-yr 5.03 15-yr 4.46 5-yr ARM 4.42 1-yr ARM 4.57

Oct 22, 2009
30-yr 5.00 15-yr 4.43 5-yr ARM 4.40 1-yr ARM 4.54

Oct 15, 2009
30-yr 4.92 15-yr 4.37 5-yr ARM 4.38 1-yr ARM 4.60

Apr 23, 2009
30-yr 4.80 15-yr 4.48 5-yr ARM 4.85 1-yr ARM 4.82

At this point the 1 year arm, being higher than the 5 year arm, is out of the picture. The 5 year arm is substantially lower than the 30 year rate. But it still seems like a worse option than the 30 year mortgage. First the 30 year rate is pretty low (the 11th lowest rate in history). In addition the expectation is that rates will move up so the benefit of getting a lower rate with a 5 year arm is outweighted by locking in for a short period of time.

In addition to rates its also interesting to look at mortgage payments. We took today's rates and using a mortgage calculator determined the payment for a 200k loan. We also did the same thing with rates from October 29th and April 16.

Nov 12
30-yr $1062.66
15-yr $1515.71
5-yr ARM $988.56
1-yr ARM $1008.62

Oct 29
30-yr $1077.31
15-yr $1525.9
5-yr ARM $1003.88
1-yr ARM $1021.7

Apr 16
30-yr $1018.12
15-yr $1574.3
5-yr ARM $1052.96
1-yr ARM $1051.74

Compared to two weeks ago a payment is 1.35 percent lower and for a 200k mortgage payment the payment is $14.65 less now than it would have been two weeks ago. While this is not a huge difference its not totally insignificant.

So what is our advice to people currently looking to get a loan? With rates near historical lows its probably a good idea to lock in rates earlier rather than later. While their is a chance that rates could move lower its doubtful they could fall too much lower than where they stand today. On the other hand there is more of a risk of mortgage rates moving up in the next few weeks.

Ki lives, and works, in Austin, Texas. He maintains a website escapesomewhere.com for future buyers of Austin real estate. The site offers information on historical mortgage rates along with a mortgage rate widget.

After rising steadily for the last 3 weeks mortgage rates fell back down this week. The 30 year rate fell from 5.03 to 4.98. The 15 year rate fell from 4.46 to 4.40. The 5 and 1 year arm fell from 4.42 to 4.35 and 4.57 to 4.47 respectively. This looks like more of a hiccup as mortgage rates steadily start there rise. At this point the overwhelming consensus is that mortgage rates are going to rise in the next six months. But the lowered rates do provide an opportunity for potential homeowners to lock in rates at sub 5.00 rates. Below are rates from the weeks from October 8, 2009 to November 5, 2009.

Nov 05, 2009
30-yr 4.98 15-yr 4.40 5-yr ARM 4.35 1-yr ARM 4.47

Oct 29, 2009
30-yr 5.03 15-yr 4.46 5-yr ARM 4.42 1-yr ARM 4.57

Oct 22, 2009
30-yr 5.00 15-yr 4.43 5-yr ARM 4.40 1-yr ARM 4.54

Oct 15, 2009
30-yr 4.92 15-yr 4.37 5-yr ARM 4.38 1-yr ARM 4.60

Oct 08, 2009
30-yr 4.87 15-yr 4.33 5-yr ARM 4.35 1-yr ARM 4.53

Apr 16, 2009
30-yr 4.54 15-yr 4.93 5-yr ARM 4.83 1-yr ARM 4.82


As has been the case for several months the interest rate to watch is the 30 year rate. When rates are low (and the expectation is that they are going to rise) there is no real reason to look at short term ARMS.

In addition to looking at rates we also calculated the mortgage payments for a 200k loan based on today's rates.

Nov 05
30-yr $1071.19
15-yr $1519.78
5-yr ARM $995.62
1-yr ARM $1009.8

Oct 22
30-yr $1073.64
15-yr $1522.84
5-yr ARM $1001.52
1-yr ARM $1018.12

Apr 09
30-yr $1015.74
15-yr $1573.26
5-yr ARM $1043.29
1-yr ARM $1057.8

This show how little rates have moved in the last two weeks. For a 30 year loan on a 200k mortgage the payment is $2.45 less a month for a decrease of about 1/5 of 1 percent

So what is our advice? First I would avoid anything but a 30 year mortgage. Their is simply too much of a chance of higher rates. Second I would start looking for a mortgage earlier in the process instead of later. Basically their are too many issues with lending right now and it's a good idea to find out any issues to get a loan earlier in the process. Second it's a good to check into the 7,500 tax credit. The new program has expanded the eligibility so if you didn't qualify for the 8,000 tax credit you might qualify for the new one.


Ki works, and lives, in Austin, Texas. His website arranges details on the Austin Tx real estate market. It also has graphs of mortgage rate trends and a few free mortgage widgets.

If you're obtaining a mortgage and contemplating whether to get a traditional home loan or adjustable rate mortgage (ARM), there are definitely some things you'll want to consider.

Before deciding on either, you'll want to understand the dynamics and look into the advantages and disadvantages of each. Some considerations to keep in mind are how long you intend on keeping the home; whether one of your intentions in buying a home is to build credit and what will give you the best annual percentage rate (APR) in the beginning and throughout the lifetime of the loan.

Traditional home loans are typically known as fixed rate mortgages (FRMs). The most popular FRM, a longer term mortgage, has the following characteristics:

* Payments are fixed throughout the term of the loan
* Are available from 15 to 40 years, in 5 year increments
* The shorter the loan term, the lower the interest rate
* The shorter the loan term, the less interest you will pay over the life of the loan
* The bulk of loan payments go to interest in the beginning of the loan
* There are penalties for early payoff on some FRMs - ask your lender

Included in FRMs is the balloon loan, a short-term, fixed-rate mortgage. The balloon loan has some advantages in that the interest is typically much lower and you have lower monthly payments than on a 15- to 40-year term loan. The terms are usually from 3 to 7 years, but you are required to pay the remaining balance in full at the end of the term.

If you are considering a balloon loan and think you will be keeping the home for a long period of time, obtain one with a refinancing option. Certain conditions will have to be met, but it allows you to convert the remaining balance of the loan into a longer fixed-rate mortgage at the end of the term without going through the buying process again.

With the caveat of the refinancing option, you don't have to go through another credit check or reapproval of the property. The interest assigned to the new loan will be at the current market rate at the time it is converted. A processing fee may be required when obtaining the new loan. You'll want to ask about this long before you agree to the balloon loan.

ARMs, on the other hand, provide you with a broad array of options, advantages and disadvantages. Similar to a balloon loan, the payments and interest rate are typically lower in the beginning of the ARM term. Periodic assessments are made throughout the lifetime of the loan, which can lower or raise your interest rate and monthly payment.

Keep in mind, interest rates typically are higher at the first assessment of the loan and often continue to rise. These kinds of loans, however, commonly have caps that put a ceiling on your maximum monthly payment that can be required of you throughout the lifetime of the loan. The excess will simply be added to the principal of your loan, which could extend the lifetime of your loan.

ARMs option ARMs are also available, can be very complex loans, so you'll want to understand the conditions of the loan, along with terminology applicable to the loan. Ask your lender prior to committing to an ARM about the advantages and disadvantages.

Generally, ARMS are best suited for those who are making an investment where rents are low and property values are high. This option allows you more cash flow. They also often benefit seasonal workers and those who own businesses where the revenues fluctuate.

Keep in mind, the interest rate on an ARM can adjust as soon as one month from the loan's inception, depending on the conditions of the loan. Some terminology to ask about and pay close attention to is:

* Lifetime cap limit
* Index
* Margin
* Periodic or adjustment cap limit
* Interest rate cap
* Loan recast
* Minimum payment factor

General advantages from a traditional mortgage are that you have significantly more flexible payment options and your monthly payments at the onset of your loan are much lower. One disadvantage is that if you only pay the minimum payment due monthly, your loan will recast at some point and your lender will recalculate your loan payments over the next 30 years based on your remaining balance. This could drastically raise your monthly loan payment.

Again, ask your lender as many questions as you can think of. Compare terms, advantages and disadvantages of each. Make sure you understand the terminology used and conditions prior to agreeing and signing to any loan.

Ki lives and works as a realtor in the Austin real estate market. There is comprehensive Austin home search on his website. His website also has detailed information on Austin real estate and a mortgage calculator widget.

Mortgage Rates Fell yet again this week. The 30 year fell from 5.04 to 4.94. This marks the 5th week in a row where mortgage rates have either fallen or held steady. For the most part rates have been slowly falling. In fact this week accounts for half of the total fall in the last five weeks. So how does 4.94 look in a historical context. It is the lowest rate we have seen since May 28th. More importantly though it is lower than any rate we have seen prior to March 26, 2009 in the 40 years we have been compiling reliable data on average mortgage rates.

In addition to the 30 year rate the other major mortgage products fell as well. The 15 year fixed fell from 4.46 to 4.36. The 5 and 1 year arm fell from 4.51 to 4.42 and 4.52 to 4.49 respectively. Below are rates from the last few weeks.

Oct 01, 2009
30-yr 4.94 15-yr 4.36 5-yr ARM 4.42 1-yr ARM 4.49

Sep 24, 2009
30-yr 5.04 15-yr 4.46 5-yr ARM 4.51 1-yr ARM 4.52

Sep 17, 2009
30-yr 5.04 15-yr 4.47 5-yr ARM 4.51 1-yr ARM 4.58

Sep 10, 2009
30-yr 5.07 15-yr 4.50 5-yr ARM 4.51 1-yr ARM 4.64

Sep 03, 2009
30-yr 5.08 15-yr 4.54 5-yr ARM 4.59 1-yr ARM 4.62

Mar 05, 2009
30-yr 5.15 15-yr 4.72 5-yr ARM 5.08 1-yr ARM 4.86

So why are rates falling. The fed has been buying mortgage backed securities to keep rates low. But the expectation is that interest rates cannot stay this low forever. Historically rates are abnormally low and at some point they are going to start moving back up. One thing to watch is the government's buying of mortgage backed securities. To stop inflation from getting out of control the fed needs to stop buying securities once the economy starts improving and recently the fed has started to pull back on the volume of mortgage securities they are purchasing.

In addition to rates its also helpful to look at actual mortgage payments to provide perspective. We translated today's rates into a payment on a 200k mortgage. We also did the same thing with rates from September 17th and February 26th.

Oct 01
30-yr $1066.32
15-yr $1515.71
5-yr ARM $1003.88
1-yr ARM $1012.18

Sep 17
30-yr $1078.53
15-yr $1526.92
5-yr ARM $1014.55
1-yr ARM $1022.89

Feb 26
30-yr $1082.21
15-yr $1548.44
5-yr ARM $1080.98
1-yr ARM $1050.53

Looking at the 30 year rate a mortgage payment is pretty similar to 2 weeks ago and 6 months ago. A 200k mortgage 6 months ago would have been 1.46 percent less or $15.89 less a month.

So what is going to happen moving forward. I would expect rates to stay around 5 for the time being. As long as the government continues buying mortgage backed securities we should see rates at historically low levels. Once the market starts to improve rates will start to increase. If the government is careful and avoids inflation rates should likely rise to 6-8 percent. If the government loses control of inflation we could see rates move up into the double digits.

Ki studied at UT. He hosts a website with a graphical Austin home search. His site also has a graph showing mortgage rate trends along with several mortgage widgets.

Mortgage rates remained steady this week. The 30 year again was at 5.04 which is a low for the summer. The other mortgage products remained relatively stable this week except for the 1 year arm which fell from 4.58 to 4.52. Below are rates for the last few weeks. As we can see overall for the last month rates have been steadily falling. But overall the movement has been very small with 30 year rates only dropping 1/10 of a point in the last month.

Sep 24, 2009
30-yr 5.04 15-yr 4.46 5-yr ARM 4.51 1-yr ARM 4.52

Sep 17, 2009
30-yr 5.04 15-yr 4.47 5-yr ARM 4.51 1-yr ARM 4.58

Sep 10, 2009
30-yr 5.07 15-yr 4.50 5-yr ARM 4.51 1-yr ARM 4.64

Sep 03, 2009
30-yr 5.08 15-yr 4.54 5-yr ARM 4.59 1-yr ARM 4.62

Aug 27, 2009
30-yr 5.14 15-yr 4.58 5-yr ARM 4.67 1-yr ARM 4.69

Feb 19, 2009
30-yr 5.04 15-yr 4.68 5-yr ARM 5.04 1-yr ARM 4.80

In addition to rates we like to look at mortgage payments to provide some perspective. We determined mortgage payments for a 200k loan based on today's rates and rates from September 10th and February 19th.

Sep 24
30-yr $1078.53
15-yr $1525.9
5-yr ARM $1014.55
1-yr ARM $1015.74

Sep 10
30-yr $1082.21
15-yr $1529.98
5-yr ARM $1014.55
1-yr ARM $1030.07

Feb 19
30-yr $1078.53
15-yr $1548.44
5-yr ARM $1078.53
1-yr ARM $1049.33

This kind of shows the same thing in that there has not been a lot of movement in mortgage rates. A payment two weeks ago would be $3.68 more a month (or 0.3% percent more).

Its also interesting that rates are exactly where they were six months ago. Of course six months ago mortgage rates were more newsworthy because at the time 5.04 (for a 30 year mortgage) was an all time low. So although 5.04 is no longer an all time low (rates dropped below 5 in April) and we are not seeing as many stories in the news mortgage rates are still very, very low by historical standards.

The two questions of course are why mortgage rates are not moving, and how long they will stay this low. The expectation is that eventually mortgage rates are going to move up. Some have suggested that mortgage rates could move above 10 percent in a year or two. The idea is that once the economy recovers mortgage rates (along with inflation) will start marching upwards due to the massive government spending during the recession. It seems that although the economy is recovering its doing so rather slowly and this is helping keep mortgage rates down for now. The other question is how long mortgage rates will stay down. My expectation is rates will probably not see that much movement until we see movement in the economy. Once the economy starts moving we should see rates start to move upward.


Ki bikes Shoal Creek when he is not working. He has focused on Austin real estate since graduating. People interested in the Austin market can perform a graphical Austin home search on his site. His site also has a graph of historical historical mortgage rates along with a mortgage rates widget.

Mortgage rates have now dropped for 3 weeks in a row. We are not seeing a lot of movement. 30 year rates have only dropped from 5.14 to 5.04 in the last 3 weeks. What is interesting is that rates are dropping at all. Most of the news have focused on how inflation is pending for the US because of unprecidented government spending. But while the news has focused on pending inflation (and corresponding higher mortgage rates) mortgage rates have continued to drop. Mortgage rates are lower than at any point before 2009 (they were lower in April 2009). Below are rates for the last few weeks along with rates from February 12 (6 months ago)

Sep 17, 2009
30-yr 5.04 15-yr 4.47 5-yr ARM 4.51 1-yr ARM 4.58

Sep 10, 2009
30-yr 5.07 15-yr 4.50 5-yr ARM 4.51 1-yr ARM 4.64

Sep 03, 2009
30-yr 5.08 15-yr 4.54 5-yr ARM 4.59 1-yr ARM 4.62

Aug 27, 2009
30-yr 5.14 15-yr 4.58 5-yr ARM 4.67 1-yr ARM 4.69

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Feb 12, 2009
30-yr 5.16 15-yr 4.81 5-yr ARM 5.23 1-yr ARM 4.94

As we can see in addition to the 30 year the other 3 major mortgage products all fell slightly as well. What interesting is how remarkably stable rates have been for the last 4 weeks. Comparing August 20, 2009 to today the most movement we have seen in any of the four mortgage products is the 1 year arm which has only fallen .11 points.

In addition to rates we like to look at mortgage payments. we calculated out the mortgage payment for a 200k house based on today' rates. We also did the same thing with rates from September 3 (2 weeks ago) and February 12 (6 months ago).

Sep 17
30-yr $1078.53
15-yr $1526.92
5-yr ARM $1014.55
1-yr ARM $1022.89

Sep 03
30-yr $1083.44
15-yr $1534.07
5-yr ARM $1024.09
1-yr ARM $1027.68

Feb 12
30-yr $1093.28
15-yr $1561.86
5-yr ARM $1101.93
1-yr ARM $1066.32

All in all we are not seeing much movement. For the 30 year rate compared to 6 months ago a payment for a 200k mortgage would only be 1.34 percent less (or $14.75 dollars).

So what should we expect to see moving forward. The majority opinion seems to be that we are headed for high inflation. And with high inflation we should also seem substantially higher mortgage rates. Although this is the majority opinion its not the only one. If the economic recovery fails to take hold we could see lower mortgage rates for awhile. Additionally, if the FED times things just right we could avoid inflation and high mortgage rates. I think this is unlikely though because the FED moving prematurely to hold off inflation could hurt the economic recovery.

What is our advice to people looking for a mortgage. My advice is to only consider a 30 year mortgage. With rates expected to increase there is no reason to get a 1 or 5 year arm. I often hear that someone is "sure" they will move in 3 years but plans often change, espically if the real estate market is slow and its difficult to sell the house.



Ki follows mortgage rates news and trends. He works as a Austin realtor. His site has a few mortgage widgets along with information on historical interest rates.

There were some expectations that mortgage rates would fall this week. Instead rates not only did not rise but fell slightly this week. The 30 year rate fell from 5.08 to 5.07 hitting a new low for the summer. The 15 year rate fell from 4.54 to 4.50. The 5 year arm fell from 4.59 to 4.51 while the 1 year arm rose slightly from 4.62 to 4.64.

The continuing fall of the 30 year rate is good news for the national real estate market which is in the midst of a lukewarm recovery. The 5 year arm is seeing more activity now that it is significantly lower than the 30 year arm. Personally I still would heavily favor the 30 year arm with the possibility of seeing double digit interest rates in 5 years because of heavy government spending. The 1 year arm since moving above the 5 year arm has moved into no mans land with there being virtually no reason to get a 1 year arm at this point in time. Below are rates for the last few weeks.

Sep 10, 2009
30-yr 5.07 15-yr 4.50 5-yr ARM 4.51 1-yr ARM 4.64

Sep 03, 2009
30-yr 5.08 15-yr 4.54 5-yr ARM 4.59 1-yr ARM 4.62

Aug 27, 2009
30-yr 5.14 15-yr 4.58 5-yr ARM 4.67 1-yr ARM 4.69

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Feb 05, 2009
30-yr 5.25 15-yr 4.92 5-yr ARM 5.26 1-yr ARM 4.92

In addition to rates we like to look at actual mortgage payments to gain some more perspective on mortgage rate changes. Based on current mortgage rates we determined the mortgage payment for a 200k loan. We did the same thing with rates from 2 weeks ago and rates from 6 months ago.

Sep 10
30-yr $1082.21
15-yr $1529.98
5-yr ARM $1014.55
1-yr ARM $1030.07

Aug 27
30-yr $1090.82
15-yr $1538.17
5-yr ARM $1033.67
1-yr ARM $1036.07

Jan 29
30-yr $1085.89
15-yr $1560.82
5-yr ARM $1106.88
1-yr ARM $1061.45

Compared to 6 months ago the mortgage payment on a 200k loan is pretty much identical. The payment is $3.68 less a month or a third of one percent.

The real question of course is where mortgage rates are going. There are a few schools of thought. The first is that mortgage rates are going to skyrocket along with inflation caused by the massive government spending over the last few years. There is another school of that that mortgage rates should rise but only slightly and that massive inflation will be curbed by the Federal Reserve.

Either way no one is advocating that mortgage rates are going to fall much further. Therefore my advice would be to look at 30 year rates and to avoid 5 and 1 year arms like the plague. If the first school of thought is correct and mortgage rates rise they will probably not move dramatically until the economy recovers.

Ki lives in Austin Texas. He site has a graph showing historical mortgage rates. His site also has news and resources on real estate in Austin as well as a search of the Austin MLS.

For the most part mortgage rates held steady this week after dropping sharply last week. The 30 year rate rose slightly from 5.12 to 5.14 after dropping from 5.29 the week before. The 15 year rate rose from 4.56 to 4.58. The 1 year arm held steady at 4.69 and the 5 year rate (the only mortgage product that saw much movement) rose from 4.57 to 4.67.

The general consensus is still that rates are going to eventual move up rapidly when the economy recovers. As long as the economy stay in the doldrums there is a decent chance rates will stay below 5.5. To put today's rates in historical context the all time low for the 30 year rate is 4.81 (reached in April 2009). So the 30 year rate is still very close to its all time low. Below are mortgage rates for the major mortgage products for the last few weeks and from January 22 (6 months ago).

Aug 27, 2009
30-yr 5.14 15-yr 4.58 5-yr ARM 4.67 1-yr ARM 4.69

Aug 20, 2009
30-yr 5.12 15-yr 4.56 5-yr ARM 4.57 1-yr ARM 4.69

Aug 13, 2009
30-yr 5.29 15-yr 4.68 5-yr ARM 4.75 1-yr ARM 4.72

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jan 22, 2009
30-yr 5.04 15-yr 5.12 5-yr ARM 4.80 1-yr ARM 5.24

For the most part mortgage rates have stayed low in spite of some encouraging signs with the economy. In addition to rates we can also look at mortgage payments. We took today's rates and translated them into a mortgage payment for a 200k loan. We also translated rates from August 13th (2 weeks ago) and January 22 (6 months ago) into a mortgage for a 200k loan.

Aug 27
30-yr $1090.82
15-yr $1538.17
5-yr ARM $1033.67
1-yr ARM $1036.07

Aug 13
30-yr $1109.36
15-yr $1548.44
5-yr ARM $1043.29
1-yr ARM $1039.68

Jan 22
30-yr $1078.53
15-yr $1594.11
5-yr ARM $1049.33
1-yr ARM $1103.16

As we saw with mortgage rates the mortgage payments are relatively stable from 2 weeks ago.

So what do we expect over the next few months? As long as the economy stays down barring other developments in the financial sector mortgage rates should stay low. When the economy starts to rebound though mortgage rates are generally expected to start rising.

What is our advice to people considering getting a loan? Basically it's the same as it has been for the last few months. I would avoid getting a 5 or 1 year arm if at all possible. Since rates should be higher in the future it makes sense to lock into long term rates while they are low. It's also a good idea to start the loan process before starting your home search. We are still in one of the strictest lending environments we have seen in decades. Minor credit issues that were ignored before are stopping loans from going through today. Starting the loan process early on can give a potential borrower time to clear up any issues on their credit report.


Ki has a comprehensive website focusing on Austin Tx real estate. Buyers can use it to search the Austin MLS. It also provides a graph showing updated mortgage interest rates.

From sea to shining sea, lenders struggle with costly mortgage fraud. Although, the fraud itself is not new, a recent FBI report reveals that the numbers are mounting and the methods used by scammers are becoming more, well, creative.

From 2007 to 2008, the FBI's annual report showed that the industry experienced an increase of more than 83.4 percent in actual mortgage fraud dollars. Last year mortgage fraud cost lenders in excess of $1.4 billion in liability, says the FBI report, and higher figures are expected for the 2009 fiscal year. Just through June of 2009, fraud figures exceeded the previous year during the same time period by around $208 million.

There were over 63,000 incidents reported by lenders regarding mortgage fraud in 2008, which was 33 percent more than reported in 2007. Increased reported incidents are partly attributed to more intense scrutiny of borrower details. Reporting inflated income in order to buy a larger home, or applying for modification under the pretense of a false job loss, have been identified as increased contributors to fraud more recently.

In the report, the FBI attributes much of the fraud to market insiders, which includes mortgage brokers, real estate agents and brokers, lenders, property appraisers, title companies, underwriters, accountants and others. Stating that insiders are attracted by the allure of low-risk, high-yield returns, the report does not expect the numbers of those involved in fraud to diminish. Due to the complexity of the mortgage process, industry insiders find ways to make a quick buck without drawing immediate attention.

Tighter lender requirements that are making it more difficult to obtain a mortgage are a contributor to the strained industry. In addition, many in the mortgage industry are no longer experiencing the benefits of the long gone real estate boom and turn to fraudulent methods to fill the gap in income.

Along with traditional methods, other major targets expected to be pursued by fraudsters are minorities and seniors struggling with foreclosure, along with federal economic stimulus programs. State-wide incidents in Florida reveal increased numbers of Hispanics being defrauded by Hispanics operating fraudulent companies under the pretense of financial and foreclosure assistance.

Federal programs operating under the Emergency Economic Stabilization Act (EESA) and the Housing and Economic Recovery Act (HERA) have opened the door to additional fraud opportunities, and are expected to become new targets for fraudsters.

California has revealed incidents of mortgage fraud perpetrated by organized crime and gang members. Along with new fraud methods, traditional modes are expected to increase and will be more closely monitored by the mortgage industry and law enforcement as communication methods become more enhanced.

The FBI is bracing itself for record high mortgage fraud. In attempts to get a handle on the mortgage fraud epidemic, the federal branch created the National Mortgage Fraud Team (NMFT). The FBI will use the team to further continue to partner and provide valuable information to the mortgage industry and law enforcement in order to capture and deter mortgage fraud perpetrators.

Ki provides a free search of Austin MLS listings on his website as a service provided for those curious about austin real estate. He has lived in Austin for over a decade. His site provides updated information on Austin real estate and mortgage rate trends

The saying "No news is good news" might be applicable with the recent trend with mortgage rates. For the last 2 or 3 weeks for the most part rates have stayed pretty much unchanged. The reason why this could be considered good news is that the economy and stock market seem to be improving. There was a lot of discussion that an improving economy would lead to inflation and in turn higher interest rates. While I still think we are eventually headed to higher interest rates it's nice that at least that is not happening now. This week the 30 year mortgage rate dropped from 5.25 to 5.22. We also saw the 15 year rate drop from 4.69 to 4.63. The 5 year arm and 1 year arm both dropped .02 points this week (4.75 to 4.73 and 4.80 to 4.78 respectively). Below are rates for the last few weeks and from January 15th (6 months ago).

Aug 06, 2009
30-yr 5.22 15-yr 4.63 5-yr ARM 4.73 1-yr ARM 4.78

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

Jul 09, 2009
30-yr 5.20 15-yr 4.69 5-yr ARM 4.82 1-yr ARM 4.82

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

Looking above the 30 year mortgage rate has only moved from 5.14 to 5.25 in the last month which is remarkably stable considering the changes in the economy and the mortgage industry. Rates are still higher than what we saw six months ago but the change is not huge. To illustrate this let's look at changes in actual mortgage payments. Using our free mortgage calculator we took today's rates and translated them into a payment for a 200k loan. We did the same thing with rates from July 23 (two weeks ago) and rates from January 15th, 2009 (6 months ago).

Aug 06
30-yr $1100.69
15-yr $1543.3
5-yr ARM $1040.88
1-yr ARM $1046.91

Jul 23
30-yr $1098.22
15-yr $1548.44
5-yr ARM $1042.08
1-yr ARM $1045.7

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

From two weeks ago we are see a change of $2.47. This is pretty insignificant. When mortgage rates first started dropping we saw a difference of $35 from one week to the next running this same calculation. Compared to 6 months ago we see a rise of $31.94 or 2.98 percent. Considering the time frame this is still a relatively small change.

First off what is my advice for people looking for a home and a mortgage? I would still avoid arms. Nothing has changed basically arm's offer a small benefit right now but with most experts predicting higher rates in the future it makes sense to look in for a longer period of time with a 30 year fixed mortgage. What is our prediction moving forward? Long term I would expect rates to move up perhaps to 10 percent or more. In the short term I have been saying that it's hard to know. Know with the economy improving I would expect to see higher rates than what we are currently experiencing a month from now. That is assuming the economy doesn't start sliding backwards.


Ki lives and works in central Texas. His website covers the Austin Texas real estate market. It also has information on historical mortgage rates along with a mortgage rates widget

Although we are not seeing too much movement it looks like mortgage rates are starting to trend upward. It's interesting to note that the stock market had its strongest July in several years. Once the economy has a full recovery there are some predictions that inflation will spike and mortgage rates will hit double digits. We are a ways from that but its interesting none the less to see rates slowly moving up and the economy slowly moves into recovery mode. All four of the major mortgage products moved up this week. The 30 year mortgage went from 5.20 to 5.25; the 15 year fixed went from 4.68 to 4.69. The 5 and 1 year arm went from 4.74 to 4.75 and 4.77 to 4.80 respectively. Below are rates from the last few weeks and from January 15, 2009 (6 months ago).

Jul 30, 2009
30-yr 5.25 15-yr 4.69 5-yr ARM 4.75 1-yr ARM 4.80

Jul 23, 2009
30-yr 5.20 15-yr 4.68 5-yr ARM 4.74 1-yr ARM 4.77

Jul 16, 2009
30-yr 5.14 15-yr 4.63 5-yr ARM 4.83 1-yr ARM 4.76

Jul 09, 2009
30-yr 5.20 15-yr 4.69 5-yr ARM 4.82 1-yr ARM 4.82

Jul 02, 2009
30-yr 5.32 15-yr 4.77 5-yr ARM 4.88 1-yr ARM 4.94

Jan 15, 2009
30-yr 4.96 15-yr 4.65 5-yr ARM 5.25 1-yr ARM 4.89

In addition to looking at rates it's always nice to translate them into actual mortgage payments. We used a mortgage calculator to translate a 200k loan into a mortgage payment based on current rates. We also did the same thing with rates from 2 weeks ago and rates from 6 months ago.

Jul 30
30-yr $1104.4
15-yr $1549.47
5-yr ARM $1043.29
1-yr ARM $1049.33

Jul 16
30-yr $1090.82
15-yr $1543.3
5-yr ARM $1052.96
1-yr ARM $1044.5

Jan 15
30-yr $1068.75
15-yr $1545.36
5-yr ARM $1104.4
1-yr ARM $1060.23

So while payments are higher (assuming one got a 30 year mortgage) they are not that much higher. Compared to 6 months ago a mortgage payment (on a 200k loan) would be $35.65 more a month or 3.33 percent higher. Enough for a fee extra coffee's a month but nothing substantial. But if rates spike up to 10 percent (as some predict) the payment would be 1755.14 which would be a 58.92 percent increase.

So what is our advice? As has been true for the last year I would avoid the arms like the plague. Although rates are up over the last few months historically speaking rates are still very low. There are very few cases where it makes sense to get an arm and risk refinancing in a few years at potentially a much higher rate. And if rates go down substantially (which is pretty unlikely) one can always refinance at the lower rate.

Also in the same vein if one is considering getting a mortgage in the next month or so I would suggest looking in early if one can do so without extra fees. Although rates could go either way there is a more of a risk of them moving up than down over the next month.


Ki writes frequently about mortgage rates. In addition to providing information about Austin Tx real estate his site provides a mortgage widget and a free mortgage calculator.

The bad news about the economy is inescapable these days. Consumer confidence is at an all time low and it's easier to follow a tennis match than keep up with the daily rise and fall of the stock market. Even though everyone is carefully watching the bottom line, life does go on.

For those looking to buy a house, the current credit crisis can seem daunting. "Mortgage" seems to be the newest bad word. However, with some careful research and thoughtful consideration of long-term plans, it is possible to get a mortgage. Mortgage rates are historically low and housing prices are coming down, making it a good time to buy a home. S Moe of LeaderOne Financial, a mortgage bank operating in the Austin real estate market, says, "For the credit worthy borrower there is lots of money to be lent." He recommends the first step in this tougher economy is to be realistic about how much house to buy.

Mortgage calculators and other useful tools are easily found on the web at sites like Realtor and Zillow. Taking the time to figure out a practical price range will save time and heartache when the actual house hunting begins.

A good place to start is to gather all financial records and look into credit scores. It is also important to determine in advance how much cash is available for a down payment. While the media may make it sound like it is impossible to qualify for a mortgage without 20% down, that is not actually the case. FHA loans can be done for as little as 3% down; nevertheless it is important to keep in mind how much the actual monthly mortgage payment will be.

Once credit worthiness and how much mortgage is truly affordable have been determined, it's time to shop for a loan. This is can be the tricky part. While the days of easily qualifying for a jumbo loan are gone, it is still possible to get a bigger loan than you can afford. "Pre-approval is key," says Mr. Moe.

Look into various lending sources such as banks and mortgage brokers. Websites like Lending Tree and E-Loan provide easy one-stop shopping, but it may be worth the effort to do some footwork. Keep in mind the loan costs, including the mortgage interest rates, broker fees, points (each point is one percent of the amount you borrow), application fees, credit report fee, and appraisals--just to name a few.

It is important to get more than one quote and be sure to read the fine print. It may take some time and effort on the part of the buyer, but the decision to purchase a house should not be made hastily. The economic news may seem bad, but the long-term investment in a family home is a sound one.

Escapeso Austin Real Estate helps investors interested in the cash flow properties. Their website provides information on the Austin real estate market. It also provides a map search of the Austin MLS along with information on current mortgage rates.

In recent months, the US real estate market has seen its fair share of turbulent weather as house prices continue to fall. While the Federal Reserve has taken significant steps towards making lending cheaper, interest rates remain artificially high as the troubled financial sector continues record write-downs. So far, only a quarter of the IMF-estimated $1 trillion in sub-prime losses have been reported, which means mortgages won't be affordable for a long while, even if homes continue to decline in value. According to the Case Schiller house price index, which covers 20 major metropolitan areas, house prices are depressing at an annual rate of 12.7%, though its rate of descent is accelerating. As long as homeowners continue to lose equity, loans will become increasingly difficult to obtain.

As this feedback loop works itself out, a regionally dependent phenomenon has begun to emerge. Although home prices averagely dropped in the US the story doesn't end there. Despite lowered economic growth forecasts and commodity-related inflationary pressures, (which are felt much more diffusely throughout the economy) several metropolitan areas have remained more robust, which explains dissenting votes on the past two rate cuts by the regional Fed chairs from Dallas and Philadelphia, respectively. Part of their reasoning is based on working against what they view as a misconception about the scope of the Fed's powers among many investors; namely, that the central bank is the only agent responsible for assisting challenged markets. Political jockeying has and will continue to play a role in their decisions, especially in the charged climate of an election year, but their dissenting votes represent the resilience of many areas of the US that continue to experience growth. From Charlottesville, North Carolina to Austin, Texas, many metropolitan areas continue to develop quickly, seemingly insulated from much of the speculation and predatory lending that has defined tracts of the US. While some of the worst affected markets in the Southwest like Phoenix, Arizona and Las Vegas will take considerable time to rebound, some price correction was inevitable. This is partially due to property value spirals in recent years, without corresponding increases in infrastructure and demand. In markets where growth had already been steady, home prices have been relatively stable.

If the federal government steps in further to freeze or help re-negotiate more of the estimated two million sub-prime mortgages projected to default over the course of 2008, prices may stabilize more quickly. Politicians, closing ranks in a show of solidarity, will likely be reluctant to make bipartisan efforts a priority while the presidential race remains in the limelight, which makes investment in the near and medium term likely to be more profitable, both in markets where prices have overcorrected and in stable markets. This is because any government-based mortgage interest rates freeze may be less favorable than current rates, which are firmly negative. Moreover, refinancing remains available should climates change. In any case, the worst may not be over for a lot of America, but some places have weathered the past eight months relatively unscathed.

Escapesomewhere Real Estate is a small brokerage working in the Austin real estate market. They host a free search of the Austin MLS along with providing updated commentary on their Austin real estate blog.

The recent sub-prime crisis is unlike any faced by the financial system before in one dubious distinction: Its effects are exacerbated by globalization to an unprecedented degree. Recent developments help illustrate exactly how this credit crunch can be differentiated from others, such as the savings and loan scandals of the 1980's, by its fundamentally larger scale and complexity. To explain the sub-prime crisis adequately, first the causes must be clearly identified. Like the savings and loan problems, predatory lending on the part of real estate brokers and agents, combined with a fair amount of financial fan-dangling, many banks loaned out more money than they normally were allowed to. By keeping these loans off their balance sheets, they were able to loan out much more than the rule-of-thumb ten times their deposits. If you consider that the sub-prime fallout is considered by most to be over $250 billion dollars, then the loans made could be in the trillions. The vehicles in which the debt was stored were basically invented for the purpose of deceiving potential investors into believing that they were sound investments, not risky sub-prime mortgages. The savings and loan crisis took a similar tact, and ended in similar levels of indignation, consumer despair, and regulation. As the years have gone by, those who cried for deregulation in order to help the already unprecedented economic growth skyrocket higher still have gotten their wish, but at a price: now that the Fed has instituted more clear standards for informed consent for borrowers, a crisis like this will likely not emerge again for some time. However, this is a lone consolation for the amazing amount of debt that has yet to be declared throughout the financial system. The reason this crisis is so much larger is because the repackaged sub-prime debt was sold not just to other Americans, or even Canadians and Europeans. It was sold all over the world, to China and India and many other countries. This means that the problem increases in complexity, as differing international regulations for the timetable on debt declaration and a financial system that has turned a boom into a spider's web of uncertainty contribute to higher risk to any institution that lends money. This, in turn, places a de facto cap on the amount of economic growth that can happen. But the problem is also much, much larger because the entire world has some degree of stake in it. Now European central banks are cutting their interest rates as well, in order to combat a problem that won't even really exist in a measurable form until two million Americans default on their mortgages in the new year. When the fallout was limited to the US, as was the case with the savings and loan banks, the turnaround time was a matter of two years, give or take. Now, the sub-prime crisis has been high on the international public radar for well over a year, but less than a tenth of the lowest estimates on the total debt have been acknowledged by lending companies. This means that recession is a much more likely outcome of this global problem than it seemed even three months ago. Living in Austin Ki works for a small realty company focused on Austin real estate. They provide information about the market on their blog about Austin real estate news along with a allowing users to start searching for Austin homes online through the Austin MLS.