Rising interest rates have resulted in some borrowers to dump their short, fixed-period adjustable-rate mortgages for longer-term loans. Experts say fears of a rapidly changing market are overblown. Borrowers who two or three years ago jumped into hybrid loans (those with low fixed rates for the first three or five years that then convert into adjustable mortgages), are now taking advantage of an infrequent phenomenon — it’s happened eight times since 1966 — in which long-term interest rates are lower than short-term ones

Despite consumer fears, rates still are on the low end and are expected to remain there for at least the rest of the year, economists and brokers say. Rates on 30-year fixed mortgages averaged 6.32% last week, according to mortgage company Freddie Mac. On Tuesday, the Federal Reserve, which has boosted interest rates 14 times since June 2004, is expected to raise the rate that banks charge each other overnight. Since the Fed began raising rates nearly two years ago, long-term rates have not risen accordingly, as they historically have.

click here for article

search for : Rising interest rate, adjustable-rate mortgage, hybrid loan, 30-year fixed mortgage, Freddie Mac, the Fed

bookmark this article to your choice of sites