Mortgage interest rates have been lower than we expected this year and everything seems to indicate they will stay that way for a while! The Fed’s interest rate policy is based on the uncertain economic times and doesn’t look to be changing. Coronavirus has hurt the US economy and led to record high unemployment. May employment numbers were better than expected and there is discussion that the economy may already be in recovery mode.
The Fed wants to keep rates low, every member of the Fed predicted low rates through 2021, possibly through 2022. They are currently buying mortgage backed securities and that is helping keep rates low. The Federal Funds rate is near 0% and sounds like it will stay that way for a while.
So what does that mean to you? Were you thinking about buying or maybe refinancing your home? Maybe you wanted to buy but decided you needed to wait a few months or a year. This means that you should be able still get lower rates for the next year or so! If you are in the process of saving money for a down payment or maybe working on your credit score, this should be good news for you! The difference between a payment on a $200,000 at 3.25% and 4.25% is just over $100 month – think about that for qualifying for a new home – $100/month can make a huge difference in what you can afford!
Rates are great now but knowing they should stay low will help you plan for the future and what you can do. If you have questions about interest rates or qualifying for a home, talk to your loan officer or give me a call!
Leslie Vanderwerf, NMLS ID#335509, Everett Financial Inc, dba Supreme Lending, An Equal Housing Lender, NMLS#2129 – Email – Website
