Mortgage Rates Continue to Sink Lower

May 6
08:10

2009

Jesse Wojdylo

Jesse Wojdylo

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The Federal Reserve Bank is determined to keep mortgage rates under 5%; it is possibly that we could see rates as low at 4% if the housing market does not get better.

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Over the last month,Mortgage Rates Continue to Sink Lower Articles the Federal Reserve Bank was injected over $1 trillion into mortgage back securities.  The one thing that this will do is put a ceiling on mortgage rates.  It seems that 5% is the ceiling that the government is trying erect.  It is highly likely that we will not see overall rates above 5% for quite some time as the Fed is only half way done with purchasing MBS. 

With this knowledge, it is hard to believe that applying for a mortgage should be done in the near term future.  If the Fed keeps pushing money into MBS why wouldn't rates continue lower?  Well, it is likely that they will, but you never know when the housing market and economy will turn around.  As soon as the government sees a significant turn around in the the housing market, it is likely they will stop injecting money and rates will start to work their way back up. 

Many home owners are considering a refinance and today is one of the best times in history to go through this process.  If you can get an interest rate under 5% how could you not consider getting a refi.  The only problem that some home owners are having is that the price of their home has decreased over the last few months.  If your appraisal value is well below what you thought it was, you may have trouble getting that extremely low mortgage rate that you expected.  If the rate is not as low as you want, then the refinance process is likely to stop dead in it's tracks.