New Mortgage or Refinancing:Should you apply now?

By B.Krishnamurthy

Is this the right time to buy that new home you saw on the way to work? Maybe you already own a home and have been too busy to refinance it. Should you refinance now? Either ways, you might want to take action now. Here's why:

In the first week of this month, Freddie Mac, one of the corporations that underwrites US's mortgages, reported that interest rates, in general, are on the rise. The 30-year fixed rates are averaging around 5.8% (at the time of writing this article).This makes it the fifth consecutive week that the interest rates for the 30-year fixed rate mortgage has gone up. That's not so good......

So, should you jump in right now? Well, it is not that bad after all. The mortgage rates are still reasonable and for this year the rates have been below 6 percent.So, for the person looking to refinance, if your current rate is above 6 percent or if you are in an interest only rate, maybe you should refinance to a fixed rate interest. If it fits your budet, the 15-year fixed rates are still attractive averaging around 5.35 percent.

For the new home buyer this is probably a good time to get in the game. Keep in mind that shot-term interest rates are not stable and the general buzz is that the Federal Reserve is expected to raise the short term interest rates. One of Freddie Mac's executives has said recently that the long-term mortgage rates are more than likely to rise over the next few months. So lock in that low rate right now.

Whether you buy a new mortgage or refinance your old one you should make a note that the interest rates quoted in this article do not include points that are usually charged by the lender. Nationally these points have averaged around 0.5 to 0.6 percent. So shop around and find the lender that has the lowest closing cost and points. This will save you a lot of money!!

Before I conclude this article, at this time last year the 30 year mortgage averaged around 5.90 percent and the 15-year averaged around 5.40 percent. So, it is still not too late to find that new mortgage or maybe even refinance your existing mortgage.