Refinance Home Loan Rates – Mortgage Rates Remain Below 5%
Posted on | October 6, 2009 | No Comments
Refinance home loan rates remain extremely low as mortgage rates are currently at 4.89%. For those of you who have been waiting to refinance your home the month to take action could very well be October. By the end of the month the Federal Reserve Bank is going to conclude it’s purchases of US Treasury, or so they claim. If this is true and the Fed takes one hand out of the pot, we could see a move up in mortgage interest rates after Halloween.
Financial markets predict the future rather than follow the past so there is a good chance that we will see treasury yields start to increase very soon. If treasury yields do start an up trend then it is highly likely that we are going to see mortgage rates follow suit. Since 1971, the 30 year fixed mortgage rate and the 10 year treasury rate yield have had a strong correlation. If one of makes a strong move in a particular direction the other soon follows.
The 200 day moving average for the 10 year treasury rate yield was tested intraday on Friday and since then the yield has moved higher. The fact that it was only an intraday test and not a closing test makes me think that we still need to see some downside to the 10 year yield although this is not always the case. If the yield has started its short term up trend you can expect it to move up to the 50 day moving average.
The 50 day moving average of the 10 year yield is currently at 3.48% while the yield sits at 3.25%. As you can see, there is plenty of room to the upside for the yield. With that being said there will be ups and downs along the way and at any time we could see this trend broken due to government interaction. For most of the summer the 10 year yield would increase until the Federal Reserve Bank made a statement and then it would fall. The Federal Reserve Bank has ultimate power of interest rates at the moment.
As stated earlier, now might be one of the best times in history to refinance your current home mortgage. If you have been thinking about going through this process but you have be reluctant now is the time to take action. If you wait until the end of October or later you could find that mortgage interest rates are headed higher. There are many lenders advertising mortgage rates under 5% so take action and refinance your home at a low mortgage rate.
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Author: Alan Lake
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