Mortgage Rate News

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It is increasingly looking as though October may be the time to buy a home. After all, many people will be rushing to take advantage of the tax credit being offered to first time home buyers. But even if you don’t qualify for a first time home buyer credit, October may be a good time to buy — if you have been planning ahead to buy a home — because there is the possibility of lower interest rates. Or at least the possibility that October is your last chance to take advantage of record-low mortgage interest rates before they start rising. Here is what Subprime Blogger points out about mortgage interest rates, Treasury yields and Federal Reserve policy:

No one knows how much yields will have to increase to be attractive to foreign investors but we can assume that 3.3% on the 10 year yield is not attractive.  If the 10 year yield pushes towards 4% like it did during the summer there is a good chance that we could see 6% mortgage rates coming in the near future.  This is not going to happen while the Fed still has both hands in the pot but it could happen when the Fed stops buying up Treasuries.

With this in mind, if mortgage rates are going to hit all time lows it is going to have to happen in October.  This is not to say that mortgage rates will not stay at low levels but all time lows will be out of the question without the Fed’s assistance buying treasuries.

And buying a home isn’t the only way to reap advantages of low interest rates. You can also refinance your home. Just realize that to get the best mortgage interest rates you are going to need a good credit score and a decently-sized down payment. Otherwise, mortgage lenders will not qualify you for the best interest rates.

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With all the hoopla surrounding mortgage market news about brokers and possible tax credits, the idea of refinancing has been kind of shunted to the side. However, it is important to note that Making Home Affordable is still out there, and is available for the rest of us. Here is what Free From Broke reminds us about the Making Home Affordable refinancing program:

If you’re among the 4-5 million homeowners who have diligently paid each mortgage payment owned by Fannie Mae or Freddie Mac, but owe 80-105% of the value of your home, this governmental program can help.  The Home Affordable Refinance program runs through 2010, and can help you depending on a few different factors. This program is aimed at helping homeowners who owe more on their mortgage than what their home is worth, or for those struggling to make mortgage payments and want to take advantage of today’s lower rates.

This program is probably not for you if you have more than 5% equity in your home. This is because you can probably get your home refinanced through more conventional means.

Now is a good time to refinance

If you already have a home mortgage loan, and are not planning on buying another home, now could be a good time to refinance. Mortgage interest rates are lower than they have been for years, and you might find that you can save hundreds — or even thousands — of dollars over the life of your home mortgage loan if you refinance. It is important to realize that the current situation does not just benefit those looking to buy homes; those looking to refinance have a chance to enjoy better interest rates and save money.

If you are interested in refinancing, you might want to speak with your mortgage lender and find out what you need to do. Also, do a cost analysis to make sure that your savings over the life of your home mortgage loan will offset closing costs and other fees associated with refinancing.

Mortgage interest rates are moving — and they’re moving lower.

Thanks to the job report today, mortgage interest rates are heading lower as unemployment rises to 9.7%. Even though initial jobless claims are down, the bottom line is that the economy is still shedding jobs. However, it is good news that the economy is shedding them at a slower rate. And besides, jobs data is a lagging economic indicator according to The Mortgage Reports. Here is what The Mortgage Reports says about jobs data and mortgage interest rates:

In other words, jobs data doesn’t so much tell us about today as it tells us about yesterday.  It’s why mortgage rate are improving this morning. Wall Street expected the jobs data to be a little bit stronger than what it was.

All the talk of rising home values and consumer confidence levels may have left investors too optimistic about jobs and consumer spending.  Today, they’re shifting expectations and spelling good news for home buyers and rate shoppers.

In the end, this is good news for home buyers and those looking to refinance. For those who want to take advantage of the first time home buyer tax credit, it comes at a great time. Home prices are low, and there are incentives galore. For those looking to refinance, well, it’s just nice.

I’m excited because I thought I’d missed the boat by dragging my feet about the whole refinancing process. But now it looks as though I get a second chance. Which is great. Refinancing could really save me money in the long run. And with mortgage rates 1.5 points lower than when I bought, I could save thousands over the life of my home mortgage loan. I could save even more if I can refinance to a 15 year or 20 year loan. I mean, really, the current climate offers a number of opportunities for those who are in a position to make some new money moves.