Acadia National Mortgage, LLC

Interest Rates

The interest rate on your loan will vary based on the product type, term of loan, and your credit score.

Fixed rate loans will generally be the highest rate among the many instrument loan choices available, but offer the safety and stability of a constant principal and ineterst payment.

Forty year mortgage amortizations are now available and help with the affordability issue facing many prospective purchasers today.

Adjustable Rate Mortgages (ARM) have gained in popularity since their introduction in the late seventies and early eighties as a way to combat high fixed rate mortgages (fixed notes peaked around 18% in mid-1982.)

Economics of Interest Rates

Mortgage Interest rates are determined by the US bond market. Like the stock market, the bond market is a dynamic market with bond prices changing minute to minute and hour to hour impacting the direction of interest rates.

Depending on the direction of bond prices and the amount of the change in price, mortgage interest rates can move up or down. Bond prices are most affected by the "Bond Markets" assessment of future inflation.

If inflation fears are perceived as real, bond traders will sell bonds dropping price and raising interest rates. Like wise, if there are no inflation fears, bond traders will want to buy bonds at current rates driving the bond price up and mortgage rates down. It is a complicated process far beyond this discussion, but understand that the interest rate we offer in the morning could be higher or lower in the afternoon, depending on the direction of the bond market.

644 E. Butler Avenue, New Britain, PA 18901| jmichael@acadia-natl.com | 215.348.1460 | Fax 215.348.3210