Interest rates are at historic lows, and have been for several years. Why would anyone need to worry about them changing?
The current word from the Fed is that they are only going to be keeping the interest rates ‘under market’ for a little while longer. You see, they have been forcing interest rates to stay at this low to help boost the economy and encourage first time home buyers to jump in. This coupled with the first time home buyer credit has really helped out the mortgage and real estate industries over the course of the last year.
What do we expect to happen?
If banks had their way, we would likely already be back in the 6% range somewhere. Rates are not going to remain this low forever.
What does this mean for you?
If you, or someone you know, is considering buying or refinancing, do it sooner than later. Act now if you are considering buying/selling/refinancing check out your options now, you don’t want to be upset with yourself later for delaying.
Is everything else staying the same?
The word from the Federal Housing Authority (FHA) is that they are changing their program some too. Right now this is the primary program we are using to finance first time home buyers. This program has the most flexibility for credit score and the lowest down payment requirement. FHA is saying that they are going to increase the cost of Mortgage Insurance and the Funding Fee associated with an FHA loan, and the minimum credit score. This means that qualifying will become a little harder, not a lot, just a little.
Thank you to Clark Davis for this Article.