Way back a couple years ago, when the subprime mortgage meltdown first reared its ugly head, the mortgage spread risk premium soared up twofold to over 3.0 percent for most home loans, causing home mortgage rates to increase significantly. Fortunately, over the past year or so, as the housing crisis settles and the big banks get bailed out, home loan lenders have dropped the mortgage spread risk premium back to it’s normal historic level at around 1.5 percent. This has been a major contributor to the fall in home mortgage rates, which are at historic lows currently. Definitely a good time to shop for a home mortgage or refinance.
Home Mortgage Rates on the Spread Premium Decline
February 7th, 2010 | Business