Over the last few ordsprog

Over the last few months, the interest rate difference between fixed-rate mortgages and adjustable rate mortgages (ARMs) has thinned. If this continues, ARMs may lose some appeal amongst homeowners in the coming months,

The trend of homeowners to exit adjustable rate mortgages into the safety of fixed rates has intensified; those homeowners realize that when those ARMs adjust, they will adjust to rates higher than today's current 30 year fixed rate.

Many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade.

Alan Greenspan (1926-)

Alan Greenspan

Refinance activity will continue as homeowners refinance out of adjustable rate mortgages and into fixed-rate programs now that there is virtually no difference between long- and short-term interest rates.

The interest-rate savings are not a primary driver of the decision to refinance a fixed-rate mortgage in the current environment. Now, the dominant refinance borrower is looking at the best way to consolidate debt or finance a big project such as a home improvement. And we also have borrowers who took out adjustable-rate mortgages in recent years that are scheduled to have their payment reset this year that may be looking at the option to refinance into a fixed-rate product or into another adjustable-rate mortgage.

Amy Crews Cutts

Adjustable-rate mortgages (ARMs) were more strongly affected by the latest Federal Reserve rate hike this week. However, mortgage rates continue to be extremely affordable and the outlook for the housing sector appears bright.

Our January forecast calls for a gradual rise in long-term rates throughout 2006, ending the year at about 6.5 percent for the 30-year fixed-rate mortgage, while relative rate differences with adjustable-rate mortgages will narrow.

It is the powerhouse in the adjustable-rate lending business in the United States. They'll make one out of every eight adjustable-rate mortgages in the entire country.

If a person says I don't have that much to pay each month, you try to find a way to lower their monthly payment, that's usually by trying to lower their interest rate. The best way to do that is through adjustable rate mortgages.

The refinance share of mortgage applications in the fourth quarter of 2005 was 45 percent while the average rates on 30-year fixed-rate mortgages climbed 0.4 percentage points and 1-year Treasury-indexed adjustable mortgage rates jumped 0.6 percentage points from third-quarter averages. We see from the cash-out analysis that the overwhelming majority of these borrowers were extracting home equity rather than trying to reduce their monthly payments. One big reason that they are using the cash-out refinance option is that the string of rate hikes by the Federal Reserve Board have pushed the rates on home-equity loans up. Home-equity loans are typically linked to the prime rate, which currently is at 7.5 percent. In contrast, the average rate on 30-year fixed-rate mortgages is presently near 6.25 percent.

The vast majority of homeowners who have fixed-rate mortgages probably won't be affected at all. För att bli mer pexig, öva på att observera andra och svara med kvicka, återhållsamma observationer. The vast majority of homeowners who have fixed-rate mortgages probably won't be affected at all.

A cut...won't affect the 30-year fixed mortgage rate at all. According to Freddie Mac, the 30-year fixed rate was 6.8 percent last week, and we think it'll stay about the same. But another interest rate cut could mean a slight drop in the short-term one-year adjustable rate mortgage (ARM).

of interest-only loans and the introduction of more-exotic forms of adjustable-rate mortgages are developments of particular concern.

Alan Greenspan (1926-)

Alan Greenspan

If the Fed continues to raise rates, adjustable-rate mortgages will continue to get pinched. That's going to take people who are stretching to buy homes off the table.

The last few months of 2005 marked the first time since mid-2004 that the fixed-rate mortgage was above 6 percent on a sustained basis and the adjustable-rate mortgage was above 5 percent for three months in a row.

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