connecticut mortgage rates

Did you know that one or more rate changes per day is normal? Actually, it is unusual not to have at least one rate change in a day. Most people do not know that. Rate quotes can change when you call back later that same day. In the lending business, a rate change can also include a change in the point cost for the same rate. In other words, a rate can be no points in the morning, then later that day cost ¼ point. That is a rate change to lenders. Did you also know that mortgage rates are not directly affected by what Alan Greenspan does? Many times a fed rate cut can cause mortgage rates to go up. Mortgage rates change primarily based on: 1) the perception of inflation, 2) times of uncertainty and 3) the movement of money in and out of the stock market--that's it. When a piece of economic data shows weakness or uncertainty in the economy, rates tend to fall. The opposite is also true. A drop in the unemployment rate, a rise in durable goods orders, a rise in the consumer confidence index--rates go up. These influencing factors can present themselves at any time, many without warning, affecting mortgage rates instantly. There is no "delay". It doesn't take time to "filter down" like some people think. Reading the paper for quotes doesn't really work because the information is old by the time you read it. Radio, TV and billboards are not the answer because the details are always missing. They just want to get you on the phone. Competitive lenders can deliver nearly identical rates to each other. Most borrowers don't ask the right questions and focus only on the interest rate. Try to think MATH and as it pertains to you. That's all that matters.

In order to choose the right type of mortgage, you need to understand the difference between a fixed rate mortgage and a variable rate mortgage (more commonly known as an adjustable rate mortgage or ARM). Fixed rate mortgages are just that -- the interest rate remains fixed at a certain percentage over the life of the loan and therefore your monthly mortgage payment (principal and interest) never changes. With an ARM, the interest rate can and probably will change at periodic intervals during the life of the loan based on the market index your lender uses.

Know the Ins and Outs of Fixed Rates

Fixed rate mortgages are some of the most common mortgages available on the market today. Since you always know what your monthly payment will be until the loan is paid in full, fixed rate mortgages are considered a safe and predictable way to borrow money with little downside risk. Usually with this stability comes higher interest rates and, subsequently, higher monthly mortgage payments.

Know the Ins and Outs of ARMs

Interest rates for ARMs are based on the market index your lender uses -- common indexes include the amount of money lenders pay on the money they borrow (as determined by the FDIC), how much money the Treasury pays on the money it borrows (or the rate on Treasury securities), how much homebuyers are paying on new mortgages nationwide (the Federal Home Loan Bank Board's average mortgage rate), or the average of the interest rate on dollar-denominated deposits traded between banks in London (commonly referred to as LIBOR, or the London Interbank Offered Rate). Typically, interest rates for ARMs can fluctuate on a six-month, 1-year, 3-year or 5-year basis. With an ARM, there are limits on just how much the interest rate (and ultimately, your monthly payment) can change. These 'caps' are outlined in your contract and fluctuations in the rate can only be made based on those terms.