Obama Refinance Plan – Fixed Rates Lower Before Moving Up?
Posted on | January 28, 2010 | No Comments
The Obama refinance plan was created to help homeowners lock into low overall mortgage interest rates. At the present time 30 year fixed mortgage rates are around 4.81% but there’s a good chance that they will start moving up soon. Many analysts predict that rates are lower now but are going to start moving higher in the early spring of 2010.
At the end of March of 2010 the Federal Reserve Bank is going to stop purchasing mortgage-backed securities. By doing this there is a very good chance that mortgage interest rates could start to move up. Several analysts have predicted that interest rates will move up at least .5% to 1% when the program is concluded.
If this is the case we will be looking at 30 year fixed mortgage rates around 6%. For all of those homeowners who are waiting for mortgage rates to drop below 4.5% they may be stuck in a tough situation. Refinancing at 6% is not nearly as attractive as refinancing below 5%. This will make it very interesting to see how mortgage applications come in.
There is a possibility that the Federal Reserve Bank will expand its mortgage-backed securities purchase program but don’t count on it. Over the last several meetings the Fed has announced that they feel that the economy is slowly getting better and there’s no reason to continue this program. It might be a good idea to lock into a low mortgage rates sooner rather than later.
Author: Jeremy North
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