“LISTEN TO WHAT THE MAN SAID.” And those aren’t just the words from Paul McCartney’s hit song of the same title…they’re also words of advice for anyone who’s considering buying a home or refinancing. Last week, Federal Reserve Chairman Ben Bernanke said that as the economy heals, the Fed will be very vigilant to protect against inflation. While inflation is not a problem at present…it will most certainly become a problem down the road. So why does this matter if you are considering purchasing or refinancing? Because inflation is the arch-enemy of Bonds and home loan rates, and just the knowledge of it coming has been causing both Bonds and home loan rates to worsen in recent days. Along with the fear of inflation, the Fed’s purchasing program of Mortgage Backed Securities is already slowing down, with the end of their buying in sight – and the reduced demand for these Bonds is also driving home loan rates higher.
Bottom line: home loan rates are already on the rise, and we won’t likely see these low historic levels again.
Interest rates are still very near historic lows – George Washington couldn’t have gotten a better interest rate – and the opportunity these low rates present is huge for homebuyers or people looking to refinance. If we haven’t talked recently about your own home loan situation – or if you have a friend, family member, neighbor or coworker who needs advice – please call or send me an email. There’s no time to waste.