October 30, 2008
30-yr 6.46 15-yr 6.19 5-yr ARM 6.36 1-yr ARM 5.38

October 23, 2008
30-yr 6.04 15-yr 5.72 5-yr ARM 6.06 1-yr ARM 5.23

October 16, 2008
30-yr 6.46 15-yr 6.14 5-yr ARM 6.14 1-yr ARM 5.16

October 9, 2008
30-yr 5.94 15-yr 5.63 5-yr ARM 5.90 1-yr ARM 5.15

October 2, 2008
30-yr 6.10 15-yr 5.78 5-yr ARM 6.00 1-yr ARM 5.12

30 Year rates have been a little more volatile than the 15 year fixed and 5 year arm products. The one mortgage product that stands out is the 1 Year ARM. It has for the most part been steadily rising over the last few weeks.

So what is going on with mortgage rates? Basically there are a number of strong forces pushing around mortgage rates like a wild hurricane. Over the last few weeks we have seen similar erratic swings with the stock market with both historic rises and drops happening several times in the last week.

Add to the uncertainty in the economy with massive government bailout programs (the Fannie Mae takeover and the 700 billion bailout) we can begin to see that the erratic movement in mortgage rates is simply a reflection of a highly erratic time period in the general economy.

Ok let’s look at what your payment would be on a 200k mortgage. Using our mortgage calculator we ran the numbers based on today’s mortgage rates. We also ran the numbers based on mortgage rates from last week.

October 30th
30-yr 1258.87
15-yr 1708.31
5-yr ARM 1245.77
1-yr ARM 1120.56

October 23rd
30-yr 1204.24
15-yr 1657.60
5-yr ARM 1206.82
1-yr ARM 1101.93

It’s hard to tell what rates are going to do moving forward. But it looks like rates will continue to remain volatile. What we are seeing is basically a tug of war between the government and the economy. The government is doing whatever it can to push down rates through takeovers, bailouts and lowering the fed rate.

Negative factors that come up in the economy tend to push rates up because it causes banks to not want to lend out money. I think we will continue to see this tug of war for the next few weeks. Add a presidential election throw in for good measure and I expect to see mortgage rate volatility to continue.

That said overall I expect mortgage rates to go down over the next month. The government shows no signs of letting up and I think they will win the tug of war in the long term.

What recommendations do I have for people looking for a loan? I hate recommending arms. If people are looking at the buying for a long term (single family home owners) I would advise to avoid arms.

If investors are planning on being in a property for a short period of time and have the cash reserves to deal with random changes in mortgage payments the 1 year is attractive because the difference between 30 year and 1 year arms is greater than what we typically see.

Ki lives in Austin are writes about trends with mortgage rates. His site provides a free mortgage calculator and a graph of historical mortgage interest rates.

The fixed mortgages have a lot of advantages than any other home loan. It will offer you a peace of mind as the interest rates in the market are quite uncertain. No body can control the interest rates in the market.

It often fluctuates and changes from one minute to another. If this happens then, nobody can know how much they have to make the payment every month. Making a budget will be quite impossible but with the fixed rate mortgage you can plan out the exact budget to spend every month.

Benefits of fixed mortgages

Since the fixed mortgage has a fixed interest rate, the monthly payment will also be the same. You can know how much you will have to pay to the lender every month.

This mortgage will also provide you total security against the rise of the interest rates that mostly occurs from time to time. For people with a fixed or tight income this mortgage will serve the best.

Another benefit that the fixed mortgages will offer is inflation though indirectly. Inflation has a big impact on the increase of monetary values of services and goods over long times. Though your income may increase but things will cost a lot more. When this happens your fixed mortgage will remain the same. Well that’s a great bonus.

The fixed rate mortgage is protected by law and no one can do to increase or decrease that rate. With this loan, home owners can plan a long financial budget. They can save a lot of money all along the way.

Types of fixed mortgage

There are many types of fixed rate mortgages most of them have a long loan period. The two most common and popular types of fixed rate mortgage are the 15 and 30 year fixed rate mortgage.

15 year fixed rate mortgage

As the name suggest the 15 fixed rate mortgage is the home loan where the interest rates does not change for 15 years and you have to pay off the loan amount during that period. This mortgage offers a lower rate than the 30 year fixed rate mortgage. The loan period is also low and you have finish paying it faster. You have a high monthly payment though.

30 year fixed rate mortgage

This is a mortgage where the loan period is for 30 years and the interest rate remains stable through out that long term. The great thing about this loan is that it has a lower monthly payment than the 15 year fixed mortgage. However this loan will come with high interest rates due to the risk involved for the lenders.

Some important things that you have to remember are that this loan is suitable for those homeowners who have the intention to stay in the house for a longer time. Before you take the loan try to compare the different companies to get the best deal.

Charles Bretz is a Financial Advisor and Author on Money Matters.Get Your Free Money Guide. Click Here

The main point is whether the financial product in question was really suitable for you at the time, whether you understood the policy you were undertaking and the risks involved. Your complaint should be dealt with seriously if the salesman did not explain that the policy as a share-based investment and that the predicted payout was not guaranteed.

You also have a good case if you were assured that the policy would pay off the mortgage and provide extra, but instead it is falling short, or if you were single when you took out the policy and did not require the life assurance element of the endowment or the salesman failed to make it clear that life assurance was included in the policy.

You also have good grounds for a complaint if your endowment matures after your retirement date and the person who sold you the policy did not point this out, or if they told you that the policy would be worth enough by retirement to pay off the mortgage.

Making a Complaint
The first place to direct your complaint should be the company which sold the endowment to you. If you are not sure whether that was the endowment company itself, your lender or another financial adviser, complain to all of them. You cannot take a complaint of this nature straight to the Financial Ombudsman, you have to complain to the relevant firm first.

State your complaint as clearly as you can, quoting any policy numbers or customer references. Explain what has happened and work chronologically, enclosing copies of any relevant documents, and try to communicate by writing as much as possible since then you have a record of who said what when. If you do speak to anyone on the phone, take down their name and take a note of what was said. Follow up with a letter which confirms your phone conversation.

What Next?
If you feel that your complaint has not been appropriately dealt with after eight weeks of your first contact, you can go directly to the ombudsman. However, some companies are being given longer to deal with complaints because they are so busy. If this is the case you will receive a letter telling you how long you should expect to wait.

If you are offered compensation, enquire about how the compensation is calculated, and do not feel pressured into accepting it unless it is an acceptable offer. The compensation should put you in the position you might have been in had you taken out a repayment mortgage.

If you aren’t happy with the company’s response, contact the independent complaints services provided by the Financial Ombudsman. It is free, and if you’re still not happy you can persue your complaint in the courts.

With significant means to buy endowments, aap will value your endowment policy completely free of charge and without obligation.

However, for many of the self-employed, the income is unpredictable, the money arriving at irregular periods, probably taking weeks or months. Lenders are weary of such customers because of a lack of surety of regular repayments or any repayment at all. In such cases, self-certification mortgages can come to the rescue of the self-employed with irregular income. Many lenders even offer an option where you can defer payments until your own invoices are paid.

Self Cert Mortgages are designed for self employed persons or people whose income is difficult to assess. These clients include those who work when there is demand for their services, salespersons who earns different amounts every month or someone with no accounting records due to the seasonal nature of their work. This is possible because self-certified mortgages are designed to approve your application on what you expect to earn, as opposed to physical proof. Before approaching any lender for the loan, it is useful to consult an independent mortgage broker to determine whether self-cert mortgage is the best option for you and if so which option to choose.

However, lenders need some kind of proof of what your average income will be. This could be via an accountant if you have one, or invoices and bank statements for the last three years. The lenders decide on the amount you can borrow depending on the income you have declared. You can expect to get about 80% of your property value. Although the declaration does not require any document as proof, it might necessitate some proof of income in the form of credit checks undertaken by your lender, bank statements or references. For example, you may have to submit a statement on any existing mortgages or references from someone such as your landlord.

However, you will need to be aware that a self-certification mortgage has certain drawbacks when compared to a normal mortgage because it usually involves a higher interest rate. This is because the lenders perceive you as being a potentially risky customer. Since it is a risky business, self-certification mortgages are unpopular with most lenders and so only a few players are operating in this field at present. Another thing you may find as a big problem is the unusually high deposit the lenders might require from you. This can go up to 25% of the house you are going to buy much more than the usual 5% on a normal mortgage.

It is important to take some time and check the mortgage market thoroughly before settling on a deal. You may also want to check a number of online lenders offering a range of competitive self-certification mortgage deals.

For reading more self certification mortgages related articles, please visit self certification mortgages

Well, before giving the very simple answer to this question, let’s briefly consider what “advising” means and if that matches our everyday experience.

According to the Collins English Dictionary, the word “advise” comes from the latin words “visere” and “videre” which, respectively, mean “to view” and “to see”. So, when someone is advising you or me, their primary objective should be to give us a “view” into the subject we are unclear about. They should be helping us “to see” more easily what we struggled to see before. These definitions of advising rather remind me of the 1970s pop-classic by Ken Boothe that chorused “I can see clearly now the rain has gone. I can see all obstacles in my way”.

But how exactly can this happen? What precisely can an adviser do, and in this specific instance what can a Mortgage Adviser do, to give someone a clearer view into their potential mortgage commitment?

TEACH.

“What, is that it … teach ?” you may ask.

Yes. That’s it. We have found from our own experience that clients make more confident decisions when we first teach them about mortgages. One key question that we ask consumers very early on is:

“Do you know the different types of mortgage payment methods?”

We are not surprised when consumers then tell us about things such as Fixed-Rate mortgages, Offset mortgages, Tracker, Discounted and Variable-Rate mortgages. However, When we help them to understand that it’s actually far simpler than that and, in reality, there are only TWO mortgage payment methods (“Capital and Interest” and “Interest Only”), they do appear to be genuinely surprised. Careful listening and teaching, leads to understanding. This, in turn, leads to confidence in both the advice and the adviser, which finally leads to a more strongly informed decision and, hopefully, the adviser winning your business.

Listen. Teach. Understand. Confidence. Business. It’s a potential Win-Win process for both you as a consumer and the Mortgage Adviser.

As a prospective “mortgagor” (i.e. someone with a mortgage), you will have reduced the potential for problems with your mortgage if your adviser takes the time to teach you the rights and responsibilities of being a mortgage holder … AND you take the time to understand. Funnily enough, this is directly in line with the Number 1 principle of the “Treating Customers Fairly” programme that the Financial Services Authority (FSA) have laid out for all mortgage advisory firms to abide by. This principle states that “consumers are to be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture”. Now tell me:

How much “fairer” can you get than a business that goes all out to demystify mortgages first, then ensures that you understand as much as possible about mortgages next, and then finally seeks to win your business?

“But how long will all of this take?” you may wonder. “It seems very time-consuming.”

Yes it does seem time-consuming and we can only speak from our own experience as every prospective client is very much an individual. However, we have been pleasantly surprised at just how confident and reassured a client becomes about their potential mortgage commitments after just 20 minutes of being guided through the mortgage maze.

Surely, your biggest financial commitment is worth spending an extra 20 minutes on with a knowledgeable Mortgage Adviser isn’t it?

So, if you want a simple, easy-to-take, approach of reducing problems that may arise with a mortgage, then get your Mortgage Adviser to take the time to teach you about mortgages first. Then you stand a far greater chance of understanding if the mortgage solution that they are advising and recommending is the one for you.

Mark Matheson has spent 16 years in Banking and Finance and is the principal adviser at Opening Doors Finance, a firm that helps you understand Mortgages and Protection e.g. Life Insurance.(Mark has a Masters Degree in Financial Markets and Derivatives.)

For help with your current mortgage or protection arrangements, click here