Recently I was listening to NPR and heard a brief discussion on interest rates and mortgages. I gathered that we are rather spoiled with the availability of stable fixed mortgage rates. Interest rates used to be much more volatile and spiked within a couple of years in the late 1970s and early 1980s. Interest rates had reached up to 17% during this time before taking years to recover. Â
Even though there have been a number of unfortunate situations with sub-prime loans recently, it could be a lot worse. When you look at our economic history, fixed interest money has never been as inexpensive to finance than now. This period of low fixed rate mortgages started about five years ago and doesn’t seem to be changing in the near future. Credit has tightened due to trouble in sub-prime lending but with a strong personal financial record and a slightly larger down payment, you can have it to your advantage. Â Not a bad situation for a buyer to have lower housing prices and inexpensive lending. Â Below is a graph provided by Well’s Fargo Mortgage showing rates dating back to 1972.
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