San Diego, CA (PRWEB) May 29, 2014
LoanLove.com is a home buyers and owners advice website that helps borrowers to find loans that they will love and take advantage of the many benefits of home ownership. A big part of finding an affordable home loan is locking in a low mortgage interest rate. Because of this, borrowers are usually very aware of any small changes in mortgage interest rates before they apply for their loan. Mortgage rates predictions at the beginning of this year forecasted a steady rise in interest rates, and while this has happened to some degree, there have also been pockets of improvement. This might leave potential borrowers wondering - will interest rates keep rising in 2014? A new guide from Loan Love helps to answer this question by providing a five year projection based on expert opinions and current mortgage rate trends.
This new guide, titled "Will Interest Rates Keep Rising (Five Year Projection)" says, "There are numerous predictions of interest rate forecasts, with most focused on the idea that historically low rates enjoyed in recent months are not sustainable as the economy continues to recover. Therefore, the longer-term forecast would seem to suggest a rise in interest rates over the next five, or even 10, years. However, a few analysts point not to the past year, but to 40 years of historical data in predicting where interest rates are headed for 30-year mortgages. When this data is closely examined before calculating a forecast, there is an overwhelming probability, slightly over 90 percent, that the rate will actually fall in five years, based on December 2013 to December 2018 comparisons."
The article goes on to explain that, using the same forecasting process, there is a 9.2 % probability that rates will be higher at this same point five years from now and only a 0.2 percent of lower or unchanged mortgage rates five years from now. But what should those who are planning to purchase a house within the next few months or even weeks take from all this? Regarding the short term mortgage rate outlook Loan Love says,
"Just as they had earlier in the year, most analysts continue to predict higher interest rates by year’s end. For example, Kiplinger’s has gone on record as stating it expects 30-year fixed rate mortgages to rise as high as 5.5 percent by the time the year draws to a close. Don’t look for this small increase in rates to do much damage to the recovery of the real estate market. Put into perspective, consider the following parameters:
- One percentage point increase from a 4.4 percent rate
- 30-year mortgage
- $100,000 home loan
The result is a mere $61 increase in monthly payment. If you are in the process of purchasing a new home, the current advice is to go ahead and lock in an interest rate once you’ve set your closing date. While they may differ when it comes to longer-range forecasting, most experts are still predicting a rise in rates before 2014 draws to a close."
For more information regarding this topic, click here to view the full guide at LoanLove.com.