Boston Homes
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Mortgage rates rise again
Several key mortgage rates advanced this week. The average rates on 30- year fixed and 15-year fixed mortgages both advanced. On the variablemortgage side, the average rate on 5/1 adjustable-rate mortgages also increased.

The average 30-year fixed-mortgage rate is 4.53 percent, an increase of 10 basis points over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was lower, at 4.47 percent.
 
At the current average rate, you’ll pay $508.47 per month in principal and interest for every $100,000 you borrow. That’s up $5.94 from what it would have been last week. The average 15-year fixed-mortgage  rate is 3.96 percent, up 7 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $738 per $100,000 borrowed. That may squeeze your monthly budget than a 30- year mortgage would, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much faster.

The average rate on a 5/1 ARM is 4.36 percent, up 7 basis points since the same time last week.

These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 4.36 percent would cost about $498 for  each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Dick Lepre, a senior loan officer with RPM Mortgage, said, “The techs are, after a period of indecision, all bearish (lower prices, higher yields), indicating higher Treasury yields and mortgage rates for the next week.”

Greg McBride, CFA, a senior vice president and chief financial analyst at Bankrate.com also believes rates are heading up. He said, “The price we pay for a more robust economic environment is higher inflation and higher interest rates. Accordingly, mortgage rates are at the highest levels in nearly seven years.”

Logan Mohtashami, a senior loan officer with the AMC Lending Group, sees rate going down. He said, “Wow, what a week. We finally got a close over 3.05 percent on the 10-year, which is the first time in this cycle that this has happened. High point of Tuesday was 3.09 percent, and Wednesday pricing is at 3.08 percent so far. As crazy as this sounds, we haven’t had any follow-through selling on Wednesday over the previous intraday high. Oil prices continue to rise, as well as lumber prices, which are on fire. In two weeks, we will have our seasonal time frame for stronger oil prices to peak so that commodity factor can give legs for higher rate pricing. However, I am going to take the under for this coming week working from a 3.08 percent 10- year yield print. The next are even more crucial: 10-year yield line for me is 3.25 percent on the 10-year. If we break higher than that, that would mean a 37-year down trend has ended. Have fun, everyone!”

Elizabeth Rose, a sales manager with Nations Lending, believes rates will hold steady. She said, “Mortgage bonds have had a tough time lately. There has been plenty of volatility, creating a multi-day decline in bonds. With renewed uncertainty regarding North and South Korea, there could be some lift in mortgage bonds. However, bonds are in a tight channel and it will be tough to see them do anything but travel sideways.”