Mortgage rates rose Wednesday afternoon with a 30 year fixed now at 6.25%. (APR 6.39)
That rate is good for borrowers with credit and equity. There was not much difference in pricing for a 20, 15 or 10 year term. All were in the 5.75% range. (5.89 APR)
A better option now is a 5/1 ARM where the rate is about a half point lower than the 30 year fixed. This is a good loan for someone who plans on refinancing or selling in the next 5 years.
On a 5 year ARM the rate is fixed for five years and can adjust a maximum of 2 points after the 60th month. It has a maximun cap of 6 points over an 8 year term.
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