In September, refinance home loan rates have slowly worked their way under 5%. Last week Mortgage rate briefly dropped below 5% and it is anticipated that we will repeatedly see this again this week as we can see that the 10 year treasury rate yield remains in a down trend.
The efforts that has been made by the Federal Reserve Bank and overall United States government has greatly helped to keep mortgage interest rates low. The mortgage rates have been kept near historically low levels by the purchases of mortgage backed securities along with treasury rates has keep .
The one area of concern that all of us are having with mortgage rates being so low is the fact that they are artificially being held down by the Fed’s buying power.By the end of October, FED has made plans that they will stop buying US Treasuries and by the end of the year the Fed has planned to culminate all the purchases of mortgage backed securities. If this will happen in reality then we can assume that mortgage rates are going to increase unless that there is some influx of foreign investors.
For the months of September and October due to the down trend in treasury yields and the continued buying of mortgage backed securities by the Fed refinance home loan rates are likely to stay near or below these levels. The one thing we have to worry about is that what will happen in November and especially 2010. When the Fed takes their hand out of the pot then at that time we are going to see a sudden rise in mortgage rates? Are rates going to raise above 6%?
If the Federal Reserve Bank extends the current programs then these thoughts may be null and void. It is presumed by many analysts that this is going to happen due to the reason that the initial plan was to stop the purchasing of Treasuries in September but that was extended through October. If we continue to see the unemployment level rise then probably Fed will continue to buy treasuries to help keep interest rates extremely low.
If you have been considering getting a home refinance now might be as good of a time as ever to start the refinance process. If you complete your application now before rates drop below 5% you will be well ahead of the crowd. Getting stuck in the bottom of a pile on a loan consultant’s desk is not what you want. If you get your application completed before the increased in interest you might save yourself a lot of time and trouble.
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Posted by R. Mak in Mortgage, Mortgage News, Mortgage Rates, Mortgage Refinance, Real Estate · 0 Comment
