Recent interest rate activity has left many homeowners and buyers wondering whether to buy, refinance or lock in. To shed some light on the subject of pricing trends and rate activity, Homes Extra caught up with Lois Volk, a mortgage broker with Invis Inc. Here’s what she had to say.
Q: What’s the best mortgage strategy right now? Variable or fixed rate? A: It depends a lot on the individual situation. First-time buyers are more inclined to choose a five-year fixed rate because they know what the payment is going to be for the next five years and it helps with their budgeting. But for second time purchasers there’s a lot more interest in the variable rate. Right now the spread between the variable rate (2.3 versus 3.79) amounts to about $200 a month on a $250,000 mortgage payment. So it’s really hard to argue that they should lock into a higher payment, but it’s just a guessing game as to how long these exceptionally low rates will last. If they’re going to be in a real tight budget situation than maybe they should be looking at the fixed rates.
By Dianne Daniel Special to QMI Agency
Last Updated: September 24, 2010 3:09pm
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