Interest Rates Going Up – LoanLove.com Explains Why

New LoanLove.com article explains the recent mortgage rate increase and how home buyers and owners will be affected by the changes.

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San Diego, CA (PRWEB) July 03, 2013

LoanLove.com has a mission to help consumers and borrowers alike in obtaining the latest information on mortgage lending trends, the real-estate market and the U.S. financial landscape for the purpose of helping them obtain a home loan they love. 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. To fulfill this goal LoanLove.com is continually updating their website with new articles and guides. Recent news of mortgage interest rates going up has been a cause for concern to many homeowners and buyers. LoanLove.com continues to help homeowners to understand the real estate market with their new article explaining the rate hike and what it means for those who were planning to purchase a home or refinance.

The Loan Love article explains: “Most financial experts say that while rates likely won’t return to their former low levels, it’s also not likely they’ll have another similar jump before the end of the year. Of course, those are the same experts who predicted rates would remain low until the unemployment rate falls to 6.5 percent, so you might want to take that guidance with a huge grain of salt and lock in your rate now. The bigger question is this: Why did rates take such a big jump in just a few days? Like a lot of interest rate issues, this one is tied in with bonds.”

The article explains that the Federal Reserve initiated a bond-purchasing program to help bolster the faltering economy. The program purchases $85 billion in U.S. Treasury and agency mortgage-backed securities each month to help keep interest rates low, which in turn spurs consumer purchasing. However, earlier this month Ben Bernanke, the chairman of the Federal Reserve, told reporters the Fed could begin tapering off bond purchases in the coming months, perhaps even terminating the program by the middle of 2014. The Fed also noted in a recent statement that it ““sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall.” It also expects inflation to be at or below the 2 percent objective set to further economic recovery.”

The Loan Love article says: “Taken together, the statement and Bernanke’s comments were enough to send stock market investors running for cover, jacking interest rates upward: Once the news was announced, the average 30-year mortgage rate jumped from 3.74 percent to 4.14. An article in the New York Times posted on June 20, 2013, reported that the largest mortgage lender in the U.S., Wells Fargo, hiked its rates from 3.9 percent to 4.5 percent. The Fed statement fell short of predicting when, and even if, it would consider limiting its bond purchases, instead saying that it “expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.”

But even those who have missed the golden opportunity to purchase a home or refinance when rates were at their lowest should not put off their plans just because of mortgage interest rates going up. Mortgage rates are still quite low and potential home buyers should be aware that rates will likely rise again rather then drop, so locking in the rate as soon as possible is probably the best course of action. For more information on the rise in interest rates, visit LoanLove.com for the full article.


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