What Mortgage Rates in Hold for the Next Year
More than 3 years ago, the economy suffered a major blow. Businesses were forced to close their doors after years of prosperity, and banks were forced to call in their loans. This economic downturn put consumers in a financial strain, and created havoc for home owners.
Thousands of people lost their homes, their credit rating and their main source of income. During the recovery process home mortgage loans were considerably low. Homeowners were able to secure a new mortgage, refinance an existing mortgage, save thousands on their debt. This was an era that many homeowners will see slipping away as the new mortgage rates for next year slowly increase.
Rates Increases as the Economy Grows
A healthy and inspiring economy are grounds for a increase in mortgage rates. As the economy gains financial strength and stability, many businesses are increasing their prices, including lenders, brokers and financial institutions. Homeowners have enjoyed having their cake, and eating it too. Now the time is come for the good old days to end or not.
In 2012 Bankrate calculated a 30 year mortgage rate at 3.983 percent, a 15 year fixed rate was 3.108 percent, and a 10 year fixed rate was 2.978 percent. The rates included a 7 point increase for the 30 year mortgage, followed by a 4 point increase in the 15 year mortgage. According to Bankrate mortgage rates in 2013 rose to a all time high or 4.75%. The home equity loan also rose by .17 percent, from its current rate of 5%. The current mortgage rates are continuing to decline to 4.18%, this is an definite decrease of 0.02%.
Mortgage Rates for 2015 Looks Promising
According to economists and other financial strategists the presumably low mortgage rates will continue through 2015. This is great news for investors, homeowners and first time home buyers. The main reason predicted for the slow increase for 2015 are due to a weak economy. Although, employment is slightly increasing, the economy itself is far from healed.
This is not good news for investors, who are expecting to see some increase in their investment profits. It is up to the Federal Reserve to call for an increase, and from the way the economy is looking at this point, this is not about to happen. What the Federal Reserve is intending to do, is simple. They are leaving interest rates for mortgages extremely low, throughout 2014, and well into 2015.
According to Banking MyWay Weekly Rate tracking system, consumers can get a 30 year fixed mortgage for a low 3.735%. Just last week mortgage rates at Fannie Mae's were down from 4.41% to 4.34%. This decline in mortgage rates shows that the economy is still not strong enough to enforce an increase at this time.
However, the current mortgage rate is still a far cry from last year's mortgage rate. Consumers that are considering buying a home, should probably do so now, while the interest rates are still low. The low rates will not last forever, but they will allow home seekers to lock in a fairly decent mortgage rate, before an unexpected “Spike” hits the housing market.
Home Owners Can Break Even
According to financial analysts, those individuals who are seeking to purchase a new home might be better off renting, if they are not willing to stay in their homes for the next four to five years. With mortgage rates so low, they are actually favorable for new home purchasers. What home buyers are seeing right now is the same mortgage rate from last year, which is carrying over into next year. With loans so low brokers are actually selling home buyers loans, and still pocketing a profit.
Although, the mortgage rate is up a little, and may stay the same or increase insignificant next year, now is still the perfect time to invest in purchasing a new home. The 30 year fixed mortgage rate is a good deal, and will continue to be, even in 2015.
Summary;
Prospective home buyers should still use caution when they hit the pavement looking for great mortgage rates. Although, it is tempting to fall for low rates, the long term aftermath eventually wears off. Mortgage rates will increase again, it is just a matter of when, and by how much. Home buyers can avoid falling into a cycle of high debt ratio to income, by thinking sensibly.
Buyers should shop around for the best mortgage rates, and lock in the best possible deal they can for next year. If you need help finding a mortgage agent, contact your local professional real estate agent for help.
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