Fixed Rate

Dear Mr. Gisriel: I am getting ready to buy a home this summer. I've noticed that mortgage interest rates have fallen recently. My question is, do you recommend that I get a fixed rate or adjustable-rate mortgage (ARM)?Cathy StringfieldColumbiaDear Ms. Stringfield:The key questions are: How long do you plan to live in the home? And are you willing to risk rates going up?The interest rate on the ARM -- though cheaper initially -- has a risk of rising, unlike the fixed-rate loan.Most conventional ARMS have a lifetime cap of 6 percent and 2 percent a year -- that is, the interest rate on an ARM can rise 2 percent a year and 6 percent over the life of the loan.

Dear Mr. Gisriel: I am getting ready to buy a home this summer. I've noticed that mortgage interest rates have fallen recently. My question is, do you recommend that I get a fixed-rate or adjustable-rate mortgage (ARM)?Lenny StablerGlen BurnieDear Mr. Stabler: The key questions are: How long do you plan to live in the home? And are you willing to risk rates going up?The interest rate on the ARM -- though cheaper initially -- has a risk of rising, unlike the fixed-rate loan. Most conventional ARMs have a lifetime cap of 6 percent and 2 percent a year -- that is, the interest rate on an ARM can rise 2 percent a year and 6 percent over the life of the loan.

As interest rates rise, some homebuyers are debating whether to buy now or wait for rates to come down. Others are racing to buy before rates climb further.Interest rates on fixed-rate mortgages have increased over 1.5 percentage point in the past few months. As rates go up, so does the cost of a house. Buyers who don't have the ability to pay more have several options. They can scale down and buy a less expensive house. They can switch from fixed-rate to adjustable-rate financing, which makes qualifying easier.

WITH general interest rates coming down, when can you expect relief on your loans? Variable-rate loans will drop on a schedule written into your lending agreement. Loans with fixed rates normally don't change, but might in some cases. Here's what to expect: On credit cards: Nearly half of all cards currently carry variable rates, says Robert McKinley, president of CardWeb.com.They're often tied to the bank prime lending rate, which dropped again last week. The prime rate currently stands at 7.5 percent.

Fact: Since October 1998, when fixed-rate mortgages could be found at 6.5 percent -- a 31-year low -- rates have been steadily climbing. Fact: The 30-year, fixed-rate mortgage is at its highest level in more than three years, hovering around 8.5 percent. Fact: Adjustable-rate mortgages, all but forgotten 18 months ago, are flexing their muscles once again. According to Freddie Mac, the federally chartered organization that supplies funds to lenders by purchasing mortgages, 30 percent of all single-family home loans are expected to be financed through an adjustable-rate mortgage, or ARM, through the first quarter of 2000.

FACED with mortgage rates over 8 percent, homebuyers are rediscovering a type of loan that's been out of favor for most of this decade: short- and intermediate-term mortgages that cut your fixed rate by a half to a full percentage point.Mortgage companies and large investors such as Freddie Mac report that three-year, five-year and seven-year loans -- all with optional features converting to 30-year financing -- have suddenly begun pulling in rate-sensitive buyers and refinancers. The national financial reporting service HSH Associates, which surveys more than 2,500 lenders, found that last week five-year "hybrid" loans carried average rates of 7.38 percent nationwide compared with 30-year conventional mortgage rates averaging 8.01 percent.

January was supposed to be a month that would see existing-home sales in the Baltimore metropolitan area finally cool off.A year ago, buoyed by unseasonably warm weather and dropping mortgage rates, the real estate market had one of its best Januarys in history, prompting Realtors this year to warn that sales couldn't outpace January 1998.But according to statistics released yesterday by the Metropolitan Regional Information System, existing-home sales for the Baltimore area climbed 17 percent over the same period last year.

The appreciation rate for homes should stay in the 4 percent to 4.5 percent range despite a predicted drop in sales in 1999, according to a survey conducted by Freddie Mac, a quasi-governmental mortgage company."

The turbulence that hit Wall Street last week may have left investors with queasy stomachs, but for the homebuyer looking for a mortgage, what turned out to be bad for Dow Jones actually may have helped Mr. and Mrs. Jones.The average 30-year fixed-rate mortgage in the Baltimore metropolitan market dropped Friday to 6.74 percent. That mark was the lowest recorded in the 15 years that HSH Associates, a New Jersey firm that tracks and analyzes mortgages, has been doing weekly surveys of local lenders.

Douglas and Christine Byerly typify what's been happening in this hectic housing market of 1998.Last year, when they put their three-bedroom, one-bathroom duplex in Baltimore on the market, there was little interest and few would-be buyers. Maybe, they thought, the timing wasn't right. Ultimately, they became uninterested and allowed the listing agreement with their real estate agent to expire and put their hopes of buying a larger home on hold.But it didn't take them long to get swept back into the market -- a market that has seen mortgage rates head lower and the fever for buying homes surge higher.

One in eight Maryland borrowers were behind on their mortgages this spring, a new report shows, a record caused by job losses and foreclosures feeding on each other in a vicious cycle. That adds up to about 132,000 homeowners who were at least 30 days late, according to a survey released Thursday by the Mortgage Bankers Association. That's up nearly 60 percent from a year ago and includes people whose lenders were trying to foreclose as of June. The country fell into recession after homeowners with risky "subprime" loans began defaulting in large numbers two years ago, sending financial institutions into a tailspin.

The economic turmoil of 2008 has left few bright spots, but here's one: Mortgage rates have plummeted. Rates on 30-year, fixed loans are hovering around 5 percent - the lowest level since Freddie Mac began tracking rates in 1971. Some economists predict a further slide in rates once Barack Obama becomes president and rolls out an economic rescue plan. And that could mean thousands of dollars in savings for Maryland homeowners. "The people who have done everything right are now going to benefit, and will be very well rewarded," said Mari Adam, a financial planner and owner of Adam Financial Associates Inc. in Boca Raton, Fla. "We are saying to our clients, anyone who can refinance should refinance.

Jail health provider purchases CMHS Hanover-based Conmed Healthcare Management, Inc., which provides health care services to county detention centers, said yesterday it had acquired Maryland-based Correctional Mental Health Services LLC for $2.2 million. CMHS provides behavioral health services to 13 counties in Maryland. The deal includes $1.8 million in cash, about 81,000 shares and assumption of certain liabilities and expenses. The transaction closed Tuesday. Andrea K. Walker Mortgage rates drop to average 6.2 percent WASHINGTON : Mortgage rates dropped this week, providing a dose of welcome news to prospective homebuyers.

Gas and food prices are rising. Wallets are hurting. But it's not all bad news. Higher prices mean the interest rate on U.S. savings bonds tied to inflation will be going up, too. The interest rate on government I bonds adjusts every six months. The next adjustment will occur Thursday, and any I bonds purchased after that will probably carry an annualized rate above 5 percent, up from 4.28 percent now. But don't wait until Thursday to buy I bonds. Buy now, and six months from now you'll be earning more than 6 percent.

For months, mortgage lenders have been backing away from borrowers with spotty credit, all but closing down the so-called subprime mortgage market. More surprisingly, they've also been increasingly loath to lend to high-end borrowers who might want to finance a high-cost home. That means doctors, lawyers, business owners and corporate executives looking for jumbo mortgages - those exceeding $417,000 - are apt to pay significantly higher interest rates than people with similar credit scores in line for smaller loans.

I have received much e-mail lately from buyers who are worried about not being able to find a good mortgage lender. They had a bad experience with their former lender or they're nervous because of all they've been reading about big banks writing down their bad mortgage loans. Choosing the right lender takes time, effort, lots of phone calls and maybe even a few hours on the Internet. This week and next, we'll explore how to figure out which mortgage type is right for you and then how to find a good mortgage lender.

The economy is going through a rough patch, and the stock market is well below its all-time high. Mortgage rates have been dropping since the end of last year. For homeowners, that can only mean one thing: It's time to think about refinancing your mortgage. "If you can save on the interest you're paying, then it's time to do a mortgage refinance," says Fred Glick, managing member of US Loans Mortgage LLC, a mortgage broker in Philadelphia. For some homeowners whose adjustable-rate mortgage (ARM)

The term "mortgage meltdown" has become so commonplace - on TV, in headlines and even during casual conversations - that you might assume that this is a tough time to get a mortgage. But the reality is starkly different: Mortgage money is plentiful, the majority of mortgage products remain relatively unaffected by troubles in the subprime segment, and interest rates for 30-year fixed-rate loans remain in the low 6 percent range for people with reasonably good - not necessarily perfect - credit backgrounds.

Student-loan borrowers cheered last month when the House voted to halve interest rates on federal loans. But don't start celebrating just yet. The bill, called the College Student Relief Act of 2007, would reduce the current rate on subsidized Stafford loans from a fixed 6.8 percent to a fixed 3.4 percent over five years. Subsidized Stafford loans are awarded based on financial need, and the federal government covers the interest while you're in school. The loan's counterpart, the unsubsidized Stafford, is available to any student, and interest accrues while you study.

So is it finally a farewell to ARMs - the once-ubiquitous adjustable-rate mortgages? You might think so with fixed-rate loans priced just slightly above one-year Treasury-indexed adjustable rate mortgages. After all, why bother with an ARM at 5.8 percent - the average contract rate at the end of December, according to the Mortgage Bankers Association of America - when you could get a 15-year fixed-rate loan at 5.9 percent, or 30-year fixed-rate mortgage at 6.2 percent, all with roughly the same origination fees?