Single Mortgage Interest Rates: Seattle, Washington
The history of mortgage interest rates is virtually unknown by most homebuyers, for they have gotten accustomed to lower rate trends. Most are unaware that until the year 2003, mortgage rates within the range of 5% where unheard of and those within the range of 5% were not unveiled until 2010. Before 2003, it was normal for interest rates to hover around the range or 7-9% until he mid-1980’s when rates rarely went below 10%.
As rates begin to decline, the opportunity for refinancing or purchase of a home increase due to mortgage interest rates being a predominate factor in this massive financial decision.
“Yes, risk-taking is inherently failure-prone. Otherwise, it would be called ‘sure-thing-taking.’” — Jim McMahon
What Causes Mortgage Rate Movement?
Although at a historic low currently, mortgage interest rates do tend to bounce about. It is not always an easy task to determine the exact cause of its volatility; but much has to do with the dynamics of supply and demand, turmoil abroad as well as capital markets (that tend to be quite fickle). Also playing a key role in how mortgage rates move are the demand for securities that are mortgage backed and outside investors.
Home-Loan Insurance/Mortgage Guarantee
Within the United States, when a down payment of a home is less than 20%, private mortgage insurance is a requirement. What is mortgage insurance? Mortgage insurance (which is also known as home-loan insurance or a mortgage guarantee) is a policy of insurance that offers compensation to investors or lenders in the event that there has been a default to the mortgage loan. The insurance can be either private or public, this is contingent upon the insurer.
The rates of insurance tend to be in the range of 0.32% – 1.20% of the principal based on the loan factors of the loan per year causing a percentage of the loan to be insured.
Shorten Your Loan by Four Years
With bi-weekly mortgage payments, the term of your mortgage loan can be shortened by up to four years. Rather than making twelve payments per year (which covers the annual amount of the interest attached to the mortgage loan), thirteen payments are made within the calendar year. Since the first dozen payments are applied to interest, the final payment is applied to the principal of the loan.
Applying the payment to the principal decreases the overall amount that is then owed to the financial institution that holds your mortgage loan. With the current mortgage rates where they are, a savvy homeowner is able to reduce the term of their mortgage loan by, up to, four years.