Mortgage rates are closely related to inflation. Mortgage rates are based on the price of mortgage backed bonds. Inflation changes the value of mortgage-backed bonds.
We are experiencing some of the lowest levels so far this year. I don’t think most of us saw this coming and in fact prepared for higher rates thinking most of the refinances that could be done were done for now anyway… not true. If the mortgage rates drop below the expected 4% we could see homeowners taking advantage of these lower rates and refinancing once again.
Also in favor of the homeowner and our economy Obama has extended the HARP program to 2015, so if you are still underwater (owe more then your home is worth) this is for you, contact a mortgage professional and learn how this program can help you.
If your mortgage is 4.75% or above you should analyzed your mortgage and see you can benefit from refinancing.
Now if you are a potential buyer and have been sitting on the fence undecided about what to do… wow is this a good time for you. Mortgage experts are getting accustomed to the new Qualified Mortgage rules or QM but this could potentially limit your buying power and specially if higher rates became an reality but we got lucky for at least the time being, so call a mortgage finance expert or myself and get pre-qualified to purchase a home while we are in this downward rate motion.
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ACMC Loan Consultant
Certified Mortgage Coach