Mortgage Rates Mixed for Week of Oct 26

Mixed mortgage rates may indicate the end of rock bottom rates; if you're considering buying a home or a mortgage refinance, now is a good time to lock in an affordable rate. Low mortgage rates provide home buyers and homeowners with financing flexibility; the lower the rates, the more you can qualify to borrow, and the lower your monthly principle and interest (P&I) payments will be.

The week ending October 26 provided mixed results for mortgage rates, with rates for 5/1 ARMs jumping from an average 4.12% last week to 4.26% this week. There's good news for those shopping for a 30 year FRM; although rates remain above 5%, they increased only one basis point from 5.15 to 5.16 percent.

Mortgage Loans: Choose Yours According to Your Needs and Goals

Those of you considering a 15 year FRM received encouragement as rates for this product decreased an average of 11 basis points from 4.71 percent to 4.60 percent. A 15 year FRM can help you pay off your mortgage sooner and at less cost than the traditional 30 year FRM; if you can afford a higher monthly payment, refinancing to a 15 year FRM can help you retire your mortgage before you're ready to retire. If you prefer to keep the lower payments of a 30 year mortgage, select a home loan that has no prepayment penalty and you can pay extra each month when your finances allow.

5/1 ARM Offers Lower (but Temporary) Fixed Rate

If you're buying your first home and plan to move up in a few years, a 5/1 ARM typically provides a mortgage rate lower than an FRM for the first five years. ARM loans can provide lower payments during the initial 'teaser" period, but researching ARM loan terms carefully can help you avoid surprises. How ARM loans adjust is determined by various financial indexes; make sure you know which index determines future adjustments for ARM loans you're considering.

ShopRate.com's live database of current mortgage rates can help you find the best mortgage rates in your area.