Behind the numbers: Mortgage rates

The Arizona Republic

May. 23, 2004

With interest rates on the rise, home buyers are clamoring for ways to minimize mortgage payments. They're looking beyond the traditional 30-year loan at such things as adjustable-rate mortgages.

But if the buyers are on a fixed income, an ARM may be the wrong choice. ARMs save money in the initial term, but their rates change later and payments can increase.

Even though rates have jumped from the 5 percent to the 6 percent range, they still remain comparatively low.

One way to secure some rate protection: Pay for an extended rate lock.

This will give the buyer more time to find the right home, at an interest rate he can afford, or let a buyer lock in for a longer construction time on a new home.

- Glen Creno

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