Don’t Hesitate to Take Advantage of Rates Below 5%

The last chance to refinance below 5% is fast approaching. Loans with a sub-5% interest rate are still available from lenders, but will be heading above 5% soon.

The first week of January saw the average 30-year, fixed-rate loan closing at 5.09%, according to a recent article on CNN.com, Chief economist for Moody’s Economy says that interest rates are “up and they’re not going to go down below 5% again.”

The Federal Reserve has been part of the reason rates have stayed low. They have purchased a significant amount of mortgage-backed securities since the beginning of 2009, which creates a “ready market” for the securities. However, this program will end on March 31. This will bring in private investors who prefer higher rates.

The news is supported by David Crowe, chief economist for the National Association of Home Builders, who says rates will go up to around 5.5% by the end of this upcoming summer.

The good news is that the economy is expected to improve along with this. Employment will continue to rise and business will grow. Rates should stay steady throughout the rest of the winter months and shouldn’t effect home sales’ busy season, which is spring.

So there always seems to be a bright side. It is recommended that borrowers just need to keep in mind that the savings of refinancing need to be worth the costs involved. If refinancing makes sense, be sure to act now to take advantage of the rates before they begin to rise.

Veronica Cannon
http://www.americanallstarrealty.com
“It’s Time to Work with an AllStar”