Obama Refinance Plan – Mortgage Interest Rates Poised to Move Higher?
Posted on | January 31, 2010 | No Comments
The Obama refinance plan was designed to help homeowners refinance their current home loan to a lower mortgage interest rate. Over the last year we have seen mortgage interest rates at or below 5% for much of the time. Going into the spring there is a very good chance that we could see mortgage rates move up at least one full percentage point.
The Federal Reserve Bank plans to conclude their mortgage-backed securities purchase program at the end of March 2010. When this happens many analysts feel that mortgage rates are going to move up .5% to 1%. Unfortunately, there is very little that can be done to keep interest rates low other than sinking money into mortgage-backed securities or US Treasuries.
The Federal Reserve Bank has been adamant about concluding this program at the end of March. Hopefully we will see mortgage rates gradually move up rather than move up very quickly but no one knows. When the market has the opportunity to set mortgage rates we can see large swings in a matter of a few weeks.
With this being the case it might be a good idea to act now rather than later. If you continue to wait until March or later you could be looking at 30 year fixed mortgage rates above 6%. This would cause many homeowners to think twice about refinancing or buying their first home.
Author: Alan Lake
Comments
Leave a Reply