Mortgage Loan Interest Rate Comparison

Mortgage interest rates have been increasing in all areas of the country, according to a survey by Best Syndication. The city survey includes: Buffalo New York, Miami Florida, Dallas Texas, Chicago Illinois, Seattle Washington and Los Angeles California (see the link to the survey below).

The rates were based on a new home purchase mortgage from $300,000 to $417,000. In last month's survey on July 20th 2008 we found an average rate of 6.520 percent. This month it was higher at 6.718 percent.

We eliminated the national lenders like Quicken and Countrywide from our survey because we wanted a local feel for the rates. In the past we have found that local lenders were usually lower than the national ones. In August of 2008 we found that for the most part, the national lenders were lower.

The Subprime Mortgage Loan Interest Rates disaster has affected the availability of loans. A person's credit history and ability to pay off the loan will weigh greatly on their chances of getting a loan.

Just because a lender advertises their rates does not mean that everyone will qualify for them. Non-conforming loans are harder to get nowadays. Lenders love loans they can sell and recoup their money with. The crash of the mortgage industry has made this more difficult to sell non-conforming loans. No one wants to buy these high risk loans.

A non-conforming loan may be a loan above the maximum amount offered in the secondary market. The conforming market includes Fannie Mae and Freddie Mac. Both institutions are in financial trouble right now. Interest only loans and adjustable rate mortgages are also very hard to sell to investors.

Lenders also want to see a bigger down payment with documentation verifying the income. Lower home prices are a double edged sword. Lower prices are more attractive for investors. But since values are still dropping no one wants to buy.

[Source: http://ezinearticles.com/?Mortgage-Loan-Interest-Rate-Comparison&id=1405596]