Buyers should not expect rates to go much lower.
Chicago, IL (PRWEB) September 11, 2015
Lenders like The Federal Savings Bank are waiting for the imminent Fed rate decision next week which will be pivotal for financial markets including mortgage rates.
Next Wednesday, the Federal Reserve’s board members will meet to decide whether or not to raise interest rates.
The Federal Savings Bank strongly urges prospective mortgage applicants to avoid the risk of a Fed rate hike and simply lock in currently low rates. If the Fed raises its core Fed funds rate, it will increase mortgage rates across the board overnight. On the opposite side, buyers should not expect rates to go much lower. If the Fed decides that raising its core rate would be pre-mature given recent market volatility, then rates may continue to trend along, at or above 3.9%. As shown on MortgageNewsDaily.com, 30-year fixed mortgage rates have not declined lower than 3.93% since August 12th. Rates have also not gone above 4% since August 18th. Rates are trending along in a very narrow range as expectations and anticipation builds toward the Fed meeting.
One entirely different outcome of a rate hike could be lower rates if market volatility increases directly as a result of the new policy. However, such volatility would be short term and rates would revert to an appropriately higher level than they are now. Thus, it’s safest to lock in a mortgage rate now rather than worry about where they may be in the future, especially when 30-year fixed rates are below 4% levels. 30-year Jumbo loan rates are even lower at 3.82%, as higher earning applicants are deemed “safer” bets for lenders compared to lower earning applicants for the same loans. Anyone looking to pay off a property in just 15 years may want to look at a 15-year fixed loan as rates are trending at the 3.25% level as of Friday, September 11th.
Contact the Federal Savings Bank, a veteran owned bank, to learn more about mortgages.