Obama Refinance Plan – Lower Mortgage Rates in February 2010?
Posted on | January 17, 2010 | 1 Comment
The Obama refinance plan was created to help all homeowners gain access to historically low mortgage interest rates. If you are looking to get a low mortgage rate in February 2010 then there should be many opportunities. Many analysts have predicted that interest rates are going to move higher in 2010 but no one has a strong idea of when rates will start to move up.
The Federal Reserve Bank has been purchasing mortgage backed securities for quite some time which has helped to keep mortgage interest rates low. At the end of March the Fed is going to stop buying mortgage backed securities which is likely going to push mortgage rates higher. Bill Gross of PIMCO feels that rates will move up .5% to 1% when the purchase program concludes.
If we see a move up of one full percentage point then the 30 year fixed mortgage rate will be very close to 6%. Many homeowners will be deterred from refinancing if mortgage rates move all the way up to 6%. The psychological level of 5% has encourage many homeowners to submit their refinance applications but if rates shoot up quickly there might be a level off or strong decline in these applications.
If you have been considering a mortgage refinance then it might be a wise decision to get started sooner rather than later. If you continue to wait to submit your mortgage application you might be leaving money on the table as interest rates could move up. If you can refinance under 5% it would be smart to get this process completed as soon as possible before the Fed concludes its mortgage backed securities purchase program.
Any major financial decision should take some serious thought. Before you jump in head first to the refinance process it is important to step back and look at your current financial situation. If you have had difficulties making bill payments in the recent past then it might smart to address that need before going through a mortgage refinance.
Author: Alan Lake
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January 17th, 2010 @ 11:44 pm
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