Mortgage rates

Mortgage interest rates have been fairly steady for most of the last month.  We have had many different economic reports that show some economic growth – unemployment  numbers were better than expected for January 2012.  On Friday, February 3rd when the report came out, the stock market rallied and we did see interest rates move up very slightly.  However by Monday the mortgage market had improved again and rates improved! 

One of the biggest concerns affecting interest rates is still the European economy, specifically Greece.  The proposed deal in Greece calls for bond investors to exchange outstanding bonds for new ones and take losses of about 70% in the process.  If most private investors don't agree, it could trigger credit defaults on the securities leading to a European bank liquidity issue.

As long as there are issues in Europe, it should continue to help keep our mortgage rates down.  The economy is slowly rebounding, although we'll see what the reports continue to show for 2012.  Right now the Federal Reserve is planning to keep interest rates that they loan money on to banks low into 2013, maybe 2014.  That will help keep the mortgage rates low, but as the economy improves, rates will start to increase.  How fast and how much is yet to be determined.  I know that a year ago many people expected rates to be significantly higher than they are now.  I won't even guess where they could be by the end of 2012!!

If you are thinking about buying a new home or refinancing, rates are about as low as they can get!  There are some things that are affecting rates, like the new fee charged to Fannie and Freddie to pay for the payroll tax extension but the rates are still staying low!  It is a great time to buy a new home with home prices and interest rates, so you may want to look at getting qualified now.  You will be able to qualify for more now than you will as rates start to increase.

Leslie Vanderwerf,  NMLS ID#335509, Summit Mortgage - Email – Website