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2019 Idaho Real Estate Blog

Mortgage Rates Are Soaring -- ACT NOW! Main Boise Home Loans
The Bond & Home Loan Markets Are In Turmoil. Is Your Financial Future Secure?

 

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Dear BuildingCredibility.com visitor:

 

 

Interest rates, including those tied to home loans, soared sharply last week across several markets, alarming consumers and investors alike. Let's examine what caused rates to increase, how it could impact you, and what you should do about it.

The sharp rise we saw last week was the result of an economic shift in the global market. Two different foreign central banks, similar to the Federal Reserve in the US, increased their short-term interest rates in an effort to fend off inflation. The first increase took place in Europe, with New Zealand following soon after. The results, while dramatic worldwide, were particularly so here in the United States, where interest rates increased across the board.

This had an immediate impact on those seeking home financing, as rates rose to the highest levels seen since last summer. While interest rates are currently under 7.00% , they may not remain there for long. As past years have demonstrated, a rapid rise in interest rates sometimes serves as merely a pre-cursor to even higher rates in the coming months.

Could we see a repeat of 1993-1994, when 30-year fixed interest rates rose from 6.69% to 8.23% in just five months? (These figures are according to HSH Associates.)

30-Year Fixed Home Loan Rate

If you are considering a new home purchase or a refinance, act now. Waiting could cost you significantly. If we were to experience a similar increase on a mortgage amount of $250,000, the monthly payment would increase by over $263 a month.

Monthly Payments

While no one can predict exactly what will happen, experts in the bond arena have expressed concerns that rates will continue to increase throughout the rest of the year. Some believe that the Federal Reserve will be forced to raise interest rates prior to year end. This would increase interest rates for existing Home Equity loans, credit card loans, and potentially existing ARMs.

If you have any questions, or should you desire more information on this subject, contact me at Millennium Mortgage & Insurance, Inc., at (208) 880-0316. You can also find us on the web at http://www.millennium-mortgage.com/, or visit my personal website at http://www.ericsloans.com.

 

Regards,

 

Eric Leigh, Senior Loan Officer

Millennium Mortgage & Insurance, Inc.

 
Posted by Eric Leigh at 6/12/2007 10:00:00 PM
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