Mortgage Rates Will Rise
Yes that is right and if you are still waiting to refinance you better lock in your interest rate sooner than later. Also, if you are buying a home you will want to get it under contract soon because the Fed’s buying of mortgage-backed securities will end at the end of the first quarter of 2010. Mortgage-backed securities are what move interest rates.
The only way this could change is if the Fed decided to increase their purchasing of mortgage-backed securities which I feel is highly unlikely even though there was discussion of it at last month’s FOMC meeting.
I have used this example before but here is it again. If you get a loan at $100,000 today with a rate of 5% your payment would be $536.82. Let’s say property values drop even more and now your loan amount is 10% less but interest rates have increased to 6%, your payment would be $539.60. Need I say more?