Hints of Inflation

Last week, due to higher oil prices and further hints of inflation, interest rates recently reached the levels we had 4 years ago before the big drop of 2003. However, lowered energy costs have recently taken away some of that upward pressure and rates have relaxed a bit.

While many borrowers are trying to affording today’s home prices, our most popular program tends to be the 10/1 ARM. Although adjustable rate loans that are just now making their first adjustment are today hitting 7.65%, this program offers a longer period of stability. Though it is slightly less in rate, the 5/1 ARM is viewed as riskier due to its shorter fixed period and many borrowers are refinancing out of those loans in favor of longer fixed periods.