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Mortgage Interest Rates Creep Up

Interest rates have been declining for the past three weeks as the markets reacted to the Federal Reserve, following Hurricane Katrina. The average 30 year fixed rate was 5.74%, slightly up from 5.71% the week before. The average rate for a 15 year fixed mortgage loan was 5.32%, up from 5.3% the week before and the 5.13% last fall. Mortgage rates didn’t move much this week as the markets wait for reaction from the Federal Reserve committee meeting.

While the outcome of this meeting next week is a relative unknown, the markets seem confident that government will take action against inflation brought on by the Hurricane. Adjustable Rate Mortgages (ARM), are also up this week. The for a 5 year ARM was 5.26%, up from 5.24% last week One year indexed ARM loans are 4.46%, this is up from last week when they were 4.45%. This time last fall, the one-year ARM was 4.03%. The interest rates quoted here require the payment of up front points in the amount of .6 point. One point is equal to 1% of the loan amount; this amount is charged as prepaid interest.

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