Current Mortgage Interest Rates - New LoanLove.com Guide To Understanding Interest Rate Trends

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Loan Love offers home buyers and loan borrowers their professional advice by pointing out the three indicators to look out for when locking in interest rates.

LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. Loan Love continues to provide help to loan borrowers everywhere by helping them understand the top three indicators that affect current mortgage interest rates in the mortgage industry in the form of a newly released article.

The experts at Loan Love are keen on staying updated on the newest mortgage happenings, especially with the fickle nature of mortgage interest rates. The article, aptly named “Will Interest Rates Go Up Or Down? The 3 Biggest Indicators” provides a rundown on what potential home buyers can expect to bring the most changes in interest rates. As the article states:

“Especially in recent years, it seems like the news is always full of stories about the economy and the indicators that help evaluate it. Although it may seem these news stories are intended to do little more than cause anxiety (or boredom), in fact, these indicators can give consumers a fairly good idea of whether interest rates are going to rise or fall – and that can be very valuable information to anyone interested in buying or refinancing a home. If you’re trying to determine if now is the best time to lock in a rate, you might want to take a look at the following three indicators to get an idea of how interest rates are likely to move.”

When deciding to lock in their rates, looking at 3 important predictors first can make all the difference in knowing how interest rates will sway. As the article piece above states, the 3 indicators that cause the most drastic changes in interest are the Gross Domestic Product (GDP), the Consumer Price Index (CPI) and the payroll employment. It is imperative that loan borrowers get familiar with these indicators as they are all linked to inflation, one of the key reasons why mortgage interest rates fluctuate. GDP shows the amount of good and services produced by a company and sold by companies in the U.S. by yearly quarters. Generally speaking, a higher growth would signal inflation which will in turn cause interest rates to increase while a lower growth will cause a decrease in interest rates, often to support consumer spending.

In relation to how the CPI (Consumer Price Index) affects interest rates, the Loan Love article explains “Released around the middle of each month, the CPI is one of the primary indicators of inflation. To determine the CPI, analysts look at the price of thousands of products within the last month to determine how those prices have shifted. When the CPI is high or there’s an overall increasing trend in the CPI, that’s considered an inflationary indicator, which can cause interest rates to rise. Conversely, a lower CPI can result in a drop in interest rates.”

Similarly to the other two indicators, payroll employment affects inflation but in a different way. This is reflected as data released on the first Friday of every month showing information on employment, working hours and earnings. Higher rates will show an increase in inflation, while lower numbers will show a decrease in interest rates. Knowing these indicators can substantially improve a loan borrower’s position, because unlike unemployment rate, GDP, CPI, and payroll employment are considered coincident indicators. In other words, this means the effects of these three indicators are immediate and will show shifts in the economy sooner than most other indicators.

Taking precaution by observing these three indicators can help loan borrowers and home owners alike in making the best decisions when locking in their rates. The loan advice website ends the article by saying: “Next time the news shifts to the economy, don’t let your eyes glaze over or your mind wander: Keeping an eye on these rates and understanding what they mean can help you decide whether to lock in a rate now or whether to hold tight, which can end up saving you lots of money in the long run.”

For more information on current mortgage interest rates, please visit LoanLove.com.

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Kevin Blue
Loan Love
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