We are inundated with radio, TV an internet commercials about mortgage financing. How is it that every company seems to have the lowest interest rates? Of course, these claims aren't true. No one company can claim to have the lowest rates, because, just like used car companies, your price is only as low as the next company willing to sacrifice profit. Who is the REAL winner? Well, it's not always the consumer!
One thing is for sure about mortgage interest rates. EVERYBODY'S RATES WILL BE CLIMBING HIGHER VERY SOON! This is not speculation, nor is it another feeble attempt to advertise, it is an economic fact and the result of an expiring stimulus program initiated shortly after the mortgage meltdown. Let me explain.
The huge amounts of mortgage investments that were sold through Wall Street, fueling our real estate economy were products called Mortgage Backed Securities. While the 'sound' like secure investments, the soon became almost worthless overnight, when owners of these risky mortgages began to default. In order to keep interest rates in check, the US Government stepped in, agreeing to purchase up to $1.25 trillion of future Mortgage Backed Securities. Since then, we have enjoyed, sometimes record low interest rates, while prices have plummeted. It's the 'perfect storm' for buyers to capitalize on terrific market conditions.
EVERYTHING MUST COME TO AN END. This purchase agreement by the US Government officially ends March 31st. No longer will our interest rates be artificially low. As of April 1st, all the true market factors of supply and demand will kick in and the result should be interesting. Many economists anticipate interest rates climbing a minimum of 3/4% immediately. Others aren't too sure.
My suggestion is to avoid the uncertainty, get off the fence and buy your home, or refinance your current home today! Uncertainty in the marketplace almost always raises prices. For once, we know WHEN that uncertainty arrives!
