As said here, Rates are great. It is a good time to refinance or to buy a home.
Mortgage interest rates continue to still be very low, ranging from 4.25% to 4.75% for a 30 year fixed rate.
So why are interest rates so low? Some investors on Wall Street fear a double dip recession approaching. And these investors will seek more stability in buying bonds, such as the MBS's, Mortgage Backed Securities. By buying more MBS's, this can control the interest rates. Another reason is because earlier this week Treasury auction bids rose to 18% to record as investors surpass bond dealers.
Interest rates at one point this week hit a historical low, but since have increased slightly. But don't fret it, when I say that they have increased, I am talking about the cost of a 30 year fixed interest rate. The rates themselves are the same, but at times during the week, the actual cost might vary from .125 of a point to .375 points. On a $200,000 mortgage, this could mean the difference of $250 to $750. Let's say that this happens on an interest rate of 4.50% for the worse. You can have the choice in paying the extra cost that was mentioned or going to a rate of 4.625% which will usually offset those costs. What does this do to your mortgage payment? On a $200,000 loan, your payment would increase $14.92. That means that it could take you anywhere from 17 to 50 months to recoup that difference. This is where a good loan officer will ask you about your goals, to determine what might be the best course of action.
Mortgage Interest Rate Future Outlook
There is a hint of inflation that may be coming back and could hurt the markets for the worse. It could be a bumpy ride ahead. Overall, I would float cautiously in the next 3 to 5 days, but for the long term, I would think rates still hold steady. Meaning that they will continue to be low in the next 30 days, but could be a tad higher than what we are experiencing now. So if I had a settlement date in the next 30 days, I might lock now.
Word to the WISE :
If you see individuals and or mortgage companies offering mortgage interest rates at 4% or lower, there could be many points and or high lender fees involved. What is being sold off on Wall Street right now are the 4.0% coupons. Just be careful in what someone might tell you or promise you just to get you in the door.
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