If you’ve been paying attention to the hoopla about mortgage rates you’ll know that a few days ago the mortgage interest rate for a 30-year fixed rate mortgage was 3.875%.  Now that’s a low rate.

Of course, it really depended on what kind of mortgage you wanted.  FHA or Conventional or VA. Some mortgage people might ask you to pay additional fees, others would pay you to take out the loan (with a lender credit).  It was all very confusing and if you weren’t already in the pipeline you can’t get that ridiculous mortgage interest rate anymore.

Why?

Because rates have inched back up.  As investors are getting over the shock of the US Government credit downgrade from AAA to AA+ they are beginning to realize that all those corporations out there are still making big profits and still holding onto piles of cash.  Translation: they are still good investments.

So when money moves from bonds back to the stock market, rates go up to attract money back to bonds. When rates go up in the bond market they go up for mortgages.

Mortgage Interest Rates Are Still Low

That doesn’t mean that rates have shot through the roof.  They haven’t.  They’ve inched up to slightly above 4%.  Still hugely low.

Here’s the thing about chasing the perfect rate.  Unless you have nerves of steel and the fortitude of a Las Vegas blackjack player you’re rarely going to “lock” on the perfect mortgage interest rate.

Hey, I know.  I’m just like everyone else.  I want the lowest rate possible so I can have the lowest payment possible.  That way I can use the money to do other things — pay down additional principal and pay the mortgage off earlier, save money for home improvements like a new roof, get that nice 60″ flat screen.

It’s just that mortgage interest rates bounce up and down faster than a yo-yo and since the financial markets seem to go crazy with amazing frequency, it’s best to work with what you have to buy your home or refinance the home you’re in.  There are lots of variables to obtaining a mortgage nowadays. Mortgage interest rates are just one of the variables.

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