Bank of America Mortgage Rates – Interest Rates Breaking 5% Soon?
Posted on | September 6, 2009 | 1 Comment
Bank of America mortgage rates have hit 5% several times in the last week. Everyone wants to know if mortgage interest rates are going to break below 5% with conviction soon. For the time being, it looks like that will be the case very soon. The 10 year treasury rate yield is now down trending with the 50 day moving average moving in a downward direction. If there is any short term rally, we will see the 50 dma serve as a point of resistance.
The Federal Reserve Bank has done an amazing job of keeping interest rates and mortgage rates near historical lows. The purchases of Mortgage Backed Securities along with US Treasuries has helped to keep mortgage rates below 5.6% for the entire year. What this will do to the future of mortgage rates and the economy we don’t know, but for the time being it is allowing many American home owners to lock in at extremely low mortgage rates.
The Fed has made it a point that this cannot go on forever and they are going to stop making these purchases. At the end of October the Fed plans to stop buying US Treasuries and by year end they are going to stop buying mortgage backed securities. This is the plan at least. If they do stop both of these purchasing plans we could see mortgage rates go up very quickly in a short period of time.
With this is mind it might be a good idea to go ahead and start getting that refinance application completed before the end of October. If the Fed does stop buying treasuries in October we are likely to see an increase in treasury yields which will help to move mortgage rates higher. Couple that with the thought of the Fed not purchasing mortgage backed securities and we might be in a bad spot for future mortgage rates.
Instead of worrying about that, now should be the time you are taking the stops to get the low mortgage interest rate you have always wanted. There are several mortgage lenders that are already advertising mortgage rates under 5% so there is no reason for you to miss out on this opportunity.
Author: Jesse Wojdylo
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September 7th, 2009 @ 7:50 am
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