Will Dukes from Summit Mortgage at Downing-Frye Realty, Inc. wrote a recent article about the spread between the 15-year and 30-year fixed rate mortgages and I found his comments quite interesting.
Will basicallty stated that it may well be time to consider a 15-year fixed rate mortgage because the relative discount for reducing the repayment period compared to a 30-year fixed rate mortgage is enormous. Investors are now giving the borrowers a big advantage if they are willing to lock in to a shorter period of time. The discount can run between 1/2 to 3/4 of a point, which again is quite significant. Spreads like this have not been seen since 2004.
One of the keys is not to formulate a strategy until you are absolutely ready to purchase a home because the spreads will fluctuate greatly on a daily basis. As Will says, "If you're not buying a home now, wait and let the game come to you."
You can certainly relax about making an immediate choice, but do know your options so when you sign the contract you will be ready.
V.K. [Mel] Melhado PA
Fine Home Specialist
Preview Naples Properties, LLC