Wells Fargo Refinance Mortgage Rates – Interest Rates Still Low
Posted on | October 11, 2009 | 1 Comment
Wells Fargo refinance mortgage rates remain near historic lows but it might not last much longer. The government has worked very hard to keep interest rates near historical lows by keep the Fed Funds Rate at basically zero. This means that banks and financial institutions have the opportunity to borrow money overnight at basically no interest. This allows banks to lend money to borrowers at a low rate.
Home mortgage rates have been near all time lows as the 30 year fixed rate mortgage has been under 5% for much of this year. During the month of September the 30 year fixed rate mortgage once again fell below 5% after a summer of bouncing between 5.1% and 5.5%. At the last Federal Reserve Bank meeting the Fed made it clear that they plan to stop buying US Treasuries by the end of October.
The reason that mortgage rates were above 5% for much of the summer was the fact that the 10 year treasury rate yield was in an up trend. There is a very strong correlation between the 10 year treasury rate yield and the 30 year fixed mortgage rate. When one is up trending the other tends to follow. At the end of the summer the 10 year yield started down trending which helped to ease mortgage rates to under 5%.
With the Fed announcing that they are going to stop buying US Treasuries it is very likely that we are going to see another rally in the treasury yields. We have already seen yields bounce off the 200 day moving average and move higher. No one knows how high yields will get but it is almost a guarantee that they will move up from these levels so they become attractive to foreign investors. If yields move up mortgage rates are going to move up as well.
With this knowledge one should realize that now is one of the best time to refinance. If you continue to wait and hope that mortgage rates drop you might find that treasury yields start increasing and mortgage rates move up well above 5%. There are still many lenders who are advertising mortgage rates under 5% so take advantage of this opportunity while you can.
Please make sure to return to Subprime Blogger for all your mortgage and financial news. To stay up to date on the current state of finances make sure to bookmark the current news category below. We offer information on everything from getting a lower mortgage rate to increasing your credit score.
Author: Alan Lake
Comments
One Response to “Wells Fargo Refinance Mortgage Rates – Interest Rates Still Low”
Leave a Reply
October 11th, 2009 @ 8:09 pm
[...] Subscribe to the comments for this post? [...]