Mortgage rates rise for the week of July 28, 2014

Posted by  on Aug 04, 2014

Most mortgage rates inched up over the last seven days, with the average for 30-year fixed-rate mortgages (FRMs) returning to where it was two weeks ago. In fact, you have to go back to the beginning of May to find a weekly average that's more than 10 basis points (0.10 percent) adrift from the current one, according to HSH.com.

If a graph of recent mortgage rates were used to design a roller coaster, it would be the most boring on the planet. And that, of course, is a good thing for home buyers and those wishing to refinance -- especially as today's rates are way below historical norms and remain within spitting distance of record lows. If they were more volatile, you might be even more stressed about finessing the timing of your transaction.

Current mortgage rates

Rates for those 30-year FRMs averaged 4.21 percent with points of 0.16 during week ending August 1, up from 4.17 percent and points of 0.17 over the previous seven days. They stood at 4.46 percent with 0.12 points during the same period in 2013. The average for 15-year FRMs was up too, to 3.48 percent and 11 points from 3.43 percent and 0.09 points. To complete the set, the averages for adjustable-rate mortgages (ARMs) also generally increased, with 30-year 1/1 ARMs reaching 2.78 percent from 2.70 percent. Points for these fell to 0.11 from 0.12.

Our live database of current mortgage rates can help you find the best mortgage rates in your area.

Can you help your renting kids?

Many younger people are finding it somewhere between hard and impossible to buy their own homes. And more and more parents are trying to give their kids a helping hand onto the first rung of the property ladder. The Bank of Mom and Dad is increasingly funding down payments, or even providing the entire purchase price in the form of a private mortgage. And, to achieve that, some are looking again at cash-out refinancing.

But, before you start to compare refinance rates, it's important to recognize some essential rules:

  1. Although the FHA currently allows the entire down payment on its home loans to be funded by a gift, some private lenders don't.
  2. If you are providing a private mortgage, you have to document it properly and then maintain proper records. Otherwise, there could be seriously unwelcome tax and other implications.
  3. You need to fully consider the possible effect on your own finances. Suppose your adult offspring has a run of bad luck and becomes unemployed or sick. For how long could you sustain your own additional mortgage obligations without your kid's payments?

Overstretching yourself isn't going to do anyone any favors. But if you can comfortably afford to help out your adult child, you could be giving an incredibly valuable gift. And now could be the best time to act. Likely medium- and long-term trends in real estate prices and mortgage rates might make their homeownership ambitions less and less achievable.

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