Mortgage Interest Rate Predictions [mortgageinsuranceguide.blogspot.com]
www.bestsyndication.com Have you ever wondered why banks continually change mortgage interest rates? There are many factors that help lenders determine both fixed rate and ARM mortgages. This video will explain how the interest rate is determined. There are many factors that affect mortgage rates including government bonds, rates that the government sponsored enterprise charge and the London Interbank Offered Rate. In this information program, we will discuss how these benchmarks are used to help bankers determine mortgage rates. One common benchmark cited for determining mortgage rates is the Federal Funds rate. This is the rate that banks charge other banks for overnight operations. That rate is currently in a range between zero and 0.25 percent. The discount rate is the Federal Reserve's primary interest rate. This is the rate that the Federal Reserve, also known as our central bank, charges member banks. Unlike the Federal Funds rate, the Federal Reserve Bank has absolute power in determining this interest rate. The current primary rate for the member banks is 0.75 percent. Banks that are not eligible for this primary rate are charged 1.25 percent. A third seasonal rate is for small depository institutions that need to meet seasonal requirements. The Prime Rate is what banks charge their best customers, usually corporations and large companies. This rate is typically 2.5 to 3 percent above the Federal Funds rate. These rates rarely change, so why do mortgage rates ...
mortgageinsuranceguide.blogspot.com How Do Banks Determine Mortgage Interest Rates?
While it is impossible to be 100% accurate, I do think there is some good information to work with and predict mortgage rates for the rest of 2009. Here are my mortgage rate predictions for the remainder of 2009, a few months into 2010, and how I made them.
Most people who own homes know that even a little bit difference in the interest rate percentage, can mean a big difference in payments, and the total cost of owning the home. Earlier this year, mortgage rates were at historic record lows of around 4.69% for a typical 30 year fixed rate mortgage. That rate stayed the same until about 2 months ago when it increased by about .5% to 5.19%. This rate increase was expected by me, and was due to the large demand from homeowners for refinancing and home loan modification. This demand was brought on by the low rates, the high number of people in bad mortgages, and the Obama housing plan.
The combination of these 3 things led to a huge amount of paperwork from homeowners looking to refinance or get a home loan modification, and led to a large amount of work. As a response to slow the applications, the mortgage lenders and banks raised rates a little. These rate increases were small enough to still help a lot of homeowners, but were enough to hold off a lot of other homeowners just looking to get a better interest rate.My Mortgage Rate Predictions for 2009:
I think for that home interest rates will drop again later this year. I predict that mortgage rates of 4.69% for a 30 year home mortgage will be here once again. I think that this will happen sometime around October and will last until April of 2010.
The rates will be lowered because the mortgage lenders and banks will be ready by then to take on a new crop of customer applications. This means that homeowners who can wait, stand a better chance of getting a better deal on their refinancing or home loan modification. Suggest Mortgage Interest Rate Predictions ArticlesQuestion by lordslady1955: How might mortgage interest rates go by Sept 30th? How might the debt deadline affect them? I can lock in a mortgage interest rate of 4.5% if I sign now. If I wait and schedule settlement for Sept 30th, how do you think mortgage interest rates might look then? The debt deadline is approaching and there is no deal in sight. How might that affect the rates? Best answer for How might mortgage interest rates go by Sept 30th? How might the debt deadline affect them?:
Answer by the kid
Rates are at historic lows right now, they won't go lower. They can realistically only go up.
Answer by MyHandsAreMadeOfPasta
I close mid August and am floating my rate. The deadline the government has set for defaulting on our obligations is around Aug. 2 or 3 so you can afford to float your rate waiting the market to stabilize after some anxiety in August. Me not so much. I can lock at 4.5 right now too and probably will in the next day or two because the closer we get to the deadline, the more the market will get nervous and more than likely rates will jump. If nothing else makes sense consider this: the chances of rates going much lower are extremely small but the chances of them going up are very good-we both stand to lose much more than we'll gain by waiting. Don't forget thought that with your closing so far out you'll probably be paying extra fees to lock in now. Normally if you lock in under 30 days there should be no locking fees-check with your bank for their own rules-no need to pay anything unnecessary when you could wait this out until September...even late September and probably see the market flatten back out by then. Rates of course can do anything as does the market so it depends on your own stomach for risk vs. savings. Me, I don't have much time to wait so I'm pulling the trigger. You've got over 2 months to wait things out. Then again....you never know...
