Mortgage Rates Hit Fresh 30 Year Lows (Again)

So rates fell slightly this week. This marks the 10th week in a row rates have fallen. This is also the 3rd week where the the 30 year mortgage rate (the most popular mortgage product) has hit new 30 year lows. The 30 year rate fell from 5.14 to 5.10. The 5 year arm rose from 5.49 to 5.57. As long as the 5 year rate is higher than the 30 year arm it doesnt really matter if it rises or falls because no one is using it. The 1 year arm fell from 4.95 to 4.85 and the 15 year arm fell from 4.91 to 4.83. Even though these rates fell more than the 30 year rate these mortgage rates are still pretty pointless. As long as the 30 year rate is this low it really makes more sense to lock into this rate for the long term.
Dec 31, 2008 30-yr 5.10 15-yr 4.83 5-yr ARM 5.57 1-yr ARM 4.85
Dec 24, 2008 30-yr 5.14 15-yr 4.91 5-yr ARM 5.49 1-yr ARM 4.95
Dec 18, 2008 30-yr 5.19 15-yr 4.92 5-yr ARM 5.60 1-yr ARM 4.94
Dec 11, 2008 30-yr 5.47 15-yr 5.20 5-yr ARM 5.82 1-yr ARM 5.09
Dec 04, 2008 30-yr 5.53 15-yr 5.33 5-yr ARM 5.77 1-yr ARM 5.02
So lets take rates and translate them into a mortgage payment. We ran the current rates on a 200k mortgage. Then we looked at rates from last week and from a October 30th when rates first started their historic fall.
Dec 31 30-yr 1085.89 15-yr 1563.93 5-yr ARM 1144.37 1-yr ARM 1055.38
Dec 24 30-yr 1090.82 15-yr 1572.22 5-yr ARM 1134.32 1-yr ARM 1067.53
October 30th30-yr $1258.8715-yr $1708.315-yr ARM $1245.771-yr ARM $1120.56
So the savings from last week are not that impressive. But compared to October 30th we are seeing much lower payments. Here are the savings for the different rates compared to October 30th.
Rate Dollar Amount Saved30 yr $172.98 15-yr $144.38 5-yr ARM $101.4 1-yr ARM $65.18
Rate Percent Drop in Mortgage Payment30 yr 13.74%15-yr 8.45%5-yr ARM 8.14%1-yr ARM 5.82%
The most interesting number to me is 13.74% the percent drop for the 30 year rate in the last 2 months. That is pretty significant.
So what is going to happen moving forward. I actually think rates are headed higher over the next two years. They might decrease a little more over the next few months. The government has a pending plan to offer mortgage rates at 4.5 percent for home buyers. But the way things are headed it would be interesting if mortgage rates fell below 4.5 percent making the governments plan somewhat pointless.
But once the economy recovers most signs point toward massive inflation. Why? The Fed has been pouring billions into the economy to stop the economy from falling apart further. This would usually cause inflation except for the fact that the economy is so sluggish. But once the economy recovers the massive amounts of cash the government has pushed into the economy should cause high levels of inflation. This will most likely lead to double digit interest rates. Some thing rates will get up to 15%. So our currently historically low interest rates might be followed by historically high interest rates.
About the Author
Ki writes regularly about mortgage rates. His site has a search of the Austin MLS along with a free mortgage calculator.

Banking In Costa Rica

If you have never been to Costa Rica or another Central American country, you may be quite surprised at how local banks outside of a first world country operate.Banks in Cost Rica often behave as if they are doing the customer a favor in serving him and not vice versa.
Despite the fact that private banks often have a modern physical appearance both outside and inside, there is no significant exception from this behavior. You may consider visiting a bank in Costa Rica more like visiting a government agency. With this concept in mind, you should get along quite well with any bank.

Almost every branch is divided into two areas: the cash point and the service area. For the cash point you need to wait in line. For the service area you need to take a number in order to get assistance.In order to avoid a long wait time, I recommend visiting at off-peak times and with a Plan B in place.

Go to the bank right after opening or after lunch time, but before quitting time. Always take a book, your notebook, and a Plan B with you if you cannot avoid a wait, despite the fact that you are there at a less busy time. By acting on your Plan B you can take a number, take a chance on not getting back to the branch in time, and do something else nearby in the meantime.
There are two exceptions where visiting the bank during off-peak hours in order to avoid a long wait may not work out. Never ever consider visiting a bank with the goal of a short waiting time during first weeks of December, when people get usually their Christmas bonus, or on the 15th or 30th of every month, when people get usually paid.

During these times, banks tend to be overcrowded regardless of the time of day.There are several differences between the public banks and the public banks.
Public banks have a disadvantage in that they can not offer you good interest rates on your deposited money. The advantage, however, is that your money will be a lot more secure in a public bank than in a private bank.

For both public banks Banco de Costa Rica and Banco Nacional the government is the warrantor. In every international money transfer with an amount over $ 10,000, the SUGEF (Superintendencia General de Entidades Financieras), the controlling institution for all financial entities, needs to be informed by the bank that performs the transaction.
Due to the fact that public banks are mainly governmental and the fact that the controlling institution is also governmental, communication between these entities is far better than between private banks and SUGEF.

This does sound like public banks have a lot of controlling processes, but the positive side is that you can open a bank account with a public bank much easier than with a private bank.
At this time private banks need to earn their trust with SUGEF, as several of them had accounts in the past with customers who tried to engage in money-laundering. Because of what happened in the past, SUGEF tightened the requirements for private bank customers to open a bank account.

If you think about opening an account with a private bank but on behalf of a Costa Rican corporation, you need to organize almost double the paperwork than you would for a public bank. As a private person you need to have Costa Rican residency even to open an account. This requirement does not exist with public banks.

About the Author
Tobias Schnellbaecher is the co-owner of the real estate broker in Costa Rica called Tierralinda Real EstateIf you are interested, you may also sign up to the following mailing list sign up

Askari Commercial Bank

Askari Commercial Bank