Getting a fixed rate home loan with a low mortgage rate can save you a ton of money over your lifetime. By just saving a full percentage point on your home loan, you could save up to hundreds of dollars each month on a monthly mortgage payment. One of the most often asked questions in the mortgage market is “how do I get a low mortgage rate for my home loan?” Well, the old say is time is everything. This is not the absolute truth, but it is very important when it comes to getting a low mortgage rate.
I think we all have friends or family members who got an extremely low mortgage rate in March or April. I have several friends that refinanced around 4.5%. This is not the case today as average mortgage rates hover around 5.2%. Historically speaking, 5.2% is still very low and is nothing to shake a stick at. Many people are wondering if mortgage rates are going to go lower or higher in the near future. No one can predict the future, but it seems like the actions of the government are not working very well to keep mortgage rates low.
If the work of the Federal Reserve Bank does not keep mortgage rates below 6%, it is very possible that we will see much higher mortgage rates in the next few years. If this is the case, 5.2% sounds VERY good. Although there is a possibility that overall rates could go lower, it is very difficult to pass up current mortgage rates. If you have been considering getting your first home loan or a refinance of your current loan, now might be one of the best times to take action. There are many interest resources available so don’t let this opportunity pass you by.
The 30 year mortgage rate has been for quite a ride over the last few weeks. After getting to the top of the roller coaster ride, it now looks like it is time for average mortgage rates to come down. Over the last three weeks, we have seen mortgage rates fall from 5.59% to 5.2% and they are likely to fall even more. With the Federal Reserve buying up United States debt, current interest rates are sure to fall.
This is great news for current home owners looking to refinance. If you have been debating a refinance in recent months, now might be the time to go after this financial opportunity. Many people will tell you that mortgage rates are sure to fall so it would be a good idea to wait, but who can pass up an opportunity to refinance around 5%. You will save some money if you wait and rates fall, but is the risk worth the reward?
It is also good news for first time home buyers. First time home buyers are getting one heck of a deal on a house this year. An $8000 tax credit, low mortgage rates and extremely low home prices make it very attractive to get your first home in 2009. You would think that this would help the overall housing market but that has yet to happen. For anyone who has considered buying a home, it would not hurt to start looking in the current economic environment.
If these mortgage rates continues lower, will it help the housing market? Common sense would say that low mortgage rates would definitely help the housing market. Sadly, this have not been the case; yet! The data that we currently have from March and April shows that home prices have no bottomed the way that we would hope. The unemployment rate continuing higher has definitely been a detriment to the overall housing market.
Even though the housing market is not getting better, there might be a silver lining. With mortgage rates low and home prices at levels not seen in decades, we might put a bottom in the housing market very soon. For all the reasons stated above, now is one of the best times in the history of the United States to own or buy a home. Hopefully we will see many new home buyers get off the sidelines and buy the new house that they have been considering.
I have known for quite some time that there is a strong relationship between daily mortgage rates and the 10 year treasury rate, but I could never find the actual equation. Thanks to Subprime Blogger and Calculated Risk for the following equation that shows the relationship between the 30 year fixed rate mortgage and the 10 year treasury rate:
y = 2.7283(x)^2 + .5881(x) +.0308
As stated on Subprime Blogger, this equation shows that mortgage rates should be around 5.477% and the last time I checked they were at 5.35%. Pretty close if you ask me as there is never a perfect correlation. Just to start the conversation, do you use the trend of the 10 year treasury rate to determine where mortgage rates are going? Do you even check mortgage rates on a consistent basis or just take the rate that is offered to you when you want to buy or refinance a house?
AUTHOR: Patty Cramer
Reading the title of this article will immediately infuriate many of you but let me play devils advocate. When Obama came into office, mortgage rates were trending lower and he did everything in his power to give every American citizen a chance to have access to those rates. For the first few months of his presidency, rates hovered around 4.9% and all was well in the housing market, right? With rates that low, surely there would be a sparked interest in real estate and home prices would bottom. Well, for the months of February and March, home prices did not bottom! In fact, 27 of 30 major markets were down month over month from February to March (this is the latest data we have).
To compound matters, mortgage rates were likely to head higher as the 10 year treasury rate started its uptrend at the beginning of 2009. Well, to put a ceiling on mortgage rates, Ben Bernanke announced that the Federal Reserve was going to buy back over $1 trillion in mortgage backed securities. Obama could have easily stepped in and stopped our printing press of a Fed chairman but he did not. As we fast forward to today, mortgage rates are now following the 10 year treasury rate and are trending higher QUICKLY.
To compound matters, many of the home owners who were trying to refinance at lower rates or modify their mortgage are now stuck. The rate they were quoted at just two weeks ago has increased almost a full percentage point. This has sent the mortgage market in a tailspin. Had Obama and Bernanke let free markets work, mortgage rates would have inched higher since March. Unfortunately, they tried to hold rates down which has caused them to shoot up almost a full percentage point in just two weeks.
This is horrible news for the housing market as prices are sure to fall even more. So, has Obama made the housing market worse than Bush did?
