Why have mortgage rates dropped so much? Especially after the FED had removed their stimulus back in the end of March. That’s a very good question. All of the analysts and the media and even some of us in the industry had predicted that interest rates would go up. Instead the opposite had occurred. Here’s what happened. Europe had much concern in the growing amount of debt, the country Greece was facing. So much so that if the country would not meet its obligations, it would have had a devastating effect to the European economy.
Greece is not the only country experiencing these problems. Other countries like Portugal, Spain, Italy and even talks of Hungary, are having mounting debt issues.
The growing concern had spread to many investors that were investing into Greece and the Euro and in turn withdrew their holdings and started to invest here in the United States as a safe haven. Not in stocks mind you, but actually treasuries, bonds and mortgage backed securities (mortgage bonds). When more people invest in mortgage backed securities the price goes higher and the interest rate goes lower. Therefore it causes a reaction to long term interest rates as it starts to fall.
How long will this last? Who knows. As long as there is continued problems in Europe, the falling Euro and low inflation, then we will see low mortgage rates for at least a little while. With the increased volitility in the marketplace, anything can happen.
With 30 year mortgage rates in the mid 4′s and 15 year mortgages in the upper 3′s this would be a great opportunity to refinance your existing mortgage if your loan balance is less than $729,750 or less. And if you are looking to make a purchase, one couldn’t pick a better time to buy with these low rates and low prices of real estate.
Even if your home has dropped in value there are a few programs that do not even require an appraisal and you can still take advantage of these low rates (while they last). Whatever your situation is call me so we can discuss a strategy to not only reduce your rate but even reduce the term of your mortgage so that your home will be paid in full many years earlier. Or, if you know of someone who is looking for a better loan strategy, don’t keep me a secret. I will be more than happy to assist them with the best loan strategy for their needs.
Until next time…
Geoffrey Bolen
Your Mortgage Advisor For Life
Primary Residential Mortgage, Inc.
Phone: 301-588-4701 x84 | Fax: 301-588-4709
Email: gbolen@primeres.com
Question: The exterior wood trim on our 20-year-old house has hardened drips and blobs of paint everywhere. We’re wondering whether we should strip the paint or simply replace the trim. Since the trim is not historically valuable, I don’t think it’s worth saving.
