Well, the writing is on the wall and this could be our "last call". As I mentioned in my last post about the Fed's comments from their most recent meeting, we are expecting rates to start going up as they curb their buying of the mortgage backed securities (MBS). Without their high-level purchases we can expect a lot more volatility in the bond market which will directly impact the mortgage rates we're able to offer. As the program phases out at the end of the first quarter of 2010 we should see 30 year fixed rates back into the 6% range. While historically speaking a 6% rate is great, opportunities to refinance into lower rates are running out.
The chart below shows activity in the bond market over the last year (Remember, the higher the price for the bond, the lower the mortgage interest rate. They work inversely of each other). You can see where it all began back in December 2008 when the Fed announced they would be buying up billions in mortgage backed securities. That got another boost in Spring, when most of these refinances took place and now we've found ourselves again at these same record pricing. So, perhaps the third time will be the charm for those who haven't acted yet.
Of course, these great rates also mean that this is a good time to buy a home. I've been beating that drum for awhile as we've discussed the first time home buyer tax credit and affordable home prices. We are hoping for an extension and expansion of that program to include ALL buyers but still have no official word. You can count on me to provide you with the facts as they become available.
Meanwhile, should you or anyone you know still be thinking about restructuring their mortgage, primarily to take advantage of these super-low rates while they are available, please call and I'll give honest advice as to whether there is a benefit. It would be my honor to be of assistance.
For more information on these great opportunities click on this link for my monthly "Views You Can Use" newsletter.
