Mark's Blog Report

Are you one of many homeowners waiting for rates to keep dropping?  Well, if you are, I believe you will continue to be waiting for many more months.  Many homeowners think that rates will continue to drop with all of the bad economic news.  Well the facts are that much of the economic news is better than expected and rates have been steadily rising for the past month.  And with all the bad news we have received over the past several months, rates are realistically worse and not better.

The lowest rates have been this year was towards the end of January.  In one day rates went up at least 0.50% in one day after the government announced the tax credit stimulus package.  Since this point, rates have never been back to this low level and I beleive they never will.  Why?

Because there has still been plenty of bad economic news, yet rates have not exponentially reflected all of the bad economic news.  I believe that the rates where shocked into giving low interest rates when all of the lenders announced closing their doors and the Feds announced lowering the Fed Rate.

Another misconception is the Fed Rate.  I have borrowers call me all the time stating that they want to reevaluate the rates because they heard that the Fed rate was being lowered.  Did you know that almost every time the Fed has lowered the Fed Rate that the conforming mortgage rates have increased.  The Prime rate which is used for most HELOCs is attached to the Fed Rate; so only your HELOC is going down in interest rates and not your conventional mortgage rate.

I hope this can help educate homeowners to not gamble too long waiting for a low interest rate.  Lock in with a rate that is beneficial to you and if your ARM is adjusting, you may want to lock in sooner.