Everyone has been speculating on what effect the three-quarters of a percentage point drop made by the Federal Reserve this week will have on mortgage rates. Mortgage rates will drop also!

According to the latest weekly survey of lenders done by the Honolulu Board of REALTORS® , the 30-year fixed mortgage rate has already slipped below 5.0% at some major local lenders. And, the cost of the 1-year ARM product is very near the same as the fixed 30-year loan for the first time in a number of years. The 1-year ARM offers you an initial teaser rate which allows you to get into your loan at a lesser cost.

Don’t forget that many lenders set their rates for this week’s survey BEFORE the Fed move so rates will probably go even lower next week. You can view the survey results now on the Board’s website at www.hicentral.com/mortrate.htm , as well as see it printed in this weekend’s editions of local newspapers.

This mortgage rate decline is good news for both buyers and sellers in the O’ahu housing market. As I’ve noted in a prior missive, lower financing costs mean more home (or condo) for your hard-earned dollars.

This entry was posted on Thursday, January 24th, 2008 at 2:13 pm and is filed under Island Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.