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Mortgage Rates Fuel Housing and Keep it Alive

By Darius Degross Subscribe to RSS | April 3rd 2012 | Views:

What does it mean when you have to pay back a $100,000 loan with a fixed interest rate of 4 percent in 30 years? It means that, within the period, you will not be paying back exactly $100,000 at all. The lender needs the 4 percent interest rate to keep his loan business alive.

This is the philosophy behind mortgage rates, making you pay back a little bit more than what you really owe. For some people, it may sound unfair, but loan agencies rely on these rates to maintain their business. Without mortgage rates, loan agencies will virtually have zero growth rate in their business. Think of it as the agency’s share of the pie for going through the trouble of getting you that home loan.

Mortgage rates do not stay constant forever; in fact, they don’t even stay constant every minute. Like a person who cannot make up his mind, the economy fluctuates either for the better or, hopefully not, for the worse. Macro and micro level factors make sure that the mortgage rate today will not be the same tomorrow.

Macro level factors like inflation rates, interbank lending rates, and the stock market affect the mortgage rate. On the other hand, micro level factors like how a person borrows money also do the same. It can be said that computing for tomorrow’s mortgage rates requires a great deal of math and scrutiny.

In the United States, mortgage rates can also vary by state, city, and town. The same goes for housing trends. For example, Washington DC mortgage rates are at 4.141 percent for a 30-year fixed rate plan and 4.326 percent for a 40-year fixed rate plan. As you can see, even the rates differ in terms of the type of mortgage.

It is important to pay attention to the changing trend of the mortgage rates DC has for today and in the coming days. There will be days when buying a house would prove advantageous due to low interest rates offered by mortgage companies. You can check real estate news sections of Yahoo! or MSN since they show a daily graph of the rise and fall of mortgage rates.

Whether going for a loan or refinance DC residents rely on, mortgage rates are important in the housing market. For more information, you can read the article on how mortgage rates work on Don’t forget to check related agencies such as Wells Fargo for more details on mortgage rates.

Darius Degross - About Author:
For more details, search DC mortgage rates, mortgage rates DC and refinance DC in Google for related information.

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