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  • July 23, 2008 at 5:00 AM #13383
    gdcox
    Participant

    GSE backed fixed rates are at their worst level , a high 4.5% points plus above Fed Funds. Is this a major downer or can adjustable rate mortgages relieve this new strain?

    July 23, 2008 at 8:23 AM #245106
    (former)FormerSanDiegan
    Participant

    Comparison to Fed funds rate, while interesting, is not all that important. Compared to the current rate of inflation (4%) current rates at 6.5-7% are still lower now than a few years ago when they were at 5.5% (and then-inflation at 2%).
    Real interest rates are currently pretty low.

    Adjustable rate mortgage do not offer enough of a break on interest rate to account for the risk of rising rates 1-5 years out.

    July 23, 2008 at 8:23 AM #245251
    (former)FormerSanDiegan
    Participant

    Comparison to Fed funds rate, while interesting, is not all that important. Compared to the current rate of inflation (4%) current rates at 6.5-7% are still lower now than a few years ago when they were at 5.5% (and then-inflation at 2%).
    Real interest rates are currently pretty low.

    Adjustable rate mortgage do not offer enough of a break on interest rate to account for the risk of rising rates 1-5 years out.

    July 23, 2008 at 8:23 AM #245259
    (former)FormerSanDiegan
    Participant

    Comparison to Fed funds rate, while interesting, is not all that important. Compared to the current rate of inflation (4%) current rates at 6.5-7% are still lower now than a few years ago when they were at 5.5% (and then-inflation at 2%).
    Real interest rates are currently pretty low.

    Adjustable rate mortgage do not offer enough of a break on interest rate to account for the risk of rising rates 1-5 years out.

    July 23, 2008 at 8:23 AM #245315
    (former)FormerSanDiegan
    Participant

    Comparison to Fed funds rate, while interesting, is not all that important. Compared to the current rate of inflation (4%) current rates at 6.5-7% are still lower now than a few years ago when they were at 5.5% (and then-inflation at 2%).
    Real interest rates are currently pretty low.

    Adjustable rate mortgage do not offer enough of a break on interest rate to account for the risk of rising rates 1-5 years out.

    July 23, 2008 at 8:23 AM #245322
    (former)FormerSanDiegan
    Participant

    Comparison to Fed funds rate, while interesting, is not all that important. Compared to the current rate of inflation (4%) current rates at 6.5-7% are still lower now than a few years ago when they were at 5.5% (and then-inflation at 2%).
    Real interest rates are currently pretty low.

    Adjustable rate mortgage do not offer enough of a break on interest rate to account for the risk of rising rates 1-5 years out.

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