Peoples Home Equity has been suggesting to the majority of its income sensitive clients who are worried about higher rates to apply for a fixed rate mortgage.
Knoxville, TN (PRWEB) November 06, 2013
Confusion is setting in with first-time homebuyers regarding interest rates. More prospective homebuyes are wondering whether now is a good time to obtain a fixed rate mortgage or to save in the short term and take an adjustable rate mortgage in hopes of a low rate mortgage in the future. Peoples Home Equity has been summarizing these recent fluctuations of mortgage rates to give its clients the facts they need to make an informed decision regarding a mortgage option.
According to Mortgage Daily News, rates reached the “highest levels since the worst few days of the government shutdown nearly 3 weeks ago.” The reason behind the strong move higher was an ISM reading above market expectations. The ISM index is a based on a number of surveys of more than 250 manufacturing firms which monitors employment, production inventories, orders, and supplier deliveries. The ISM index gives readers a good understanding of economic conditions in the United States. Today the ISM Index posted 55.4 beating Octobers reading of 54.4. Usually, when this report posts a better than expected number mortgage rates rise as lenders sensitive to inflationary conditions of an improving economy. Indeed rates rose by 0.05% today on a 30 year fixed rate mortgage. If economic data points continue to improve, such as employment rates, home values, or great productivity then homebuyers should expect higher interest rates in the future. This is especially true if the Federal Reserve reduces its asset repurchase program.
Peoples Home Equity has been suggesting to the majority of its income sensitive clients who are worried about higher rates to apply for a fixed rate mortgage. Prospective homebuyers should understand that trends can remain for extended periods of time. Since the housing market has been experiencing consecutive months of price gains in the past year and a half one cannot predict when the trend will end. However, for those weary of home prices getting ahead of themselves recently, then an adjustable rate mortgage would be the best option since it will save quite a bit of money on the lien holder’s monthly payment.
For mortgage options please contact a People Home Equity representative at: 615-872-0220.