Long Term Mortgage Refinance Rates and Recovery
Will Rising Mortgage Refinance Rates Stop the recovery process soon>
Just when you thought that it could not get any worse for the economy, interest rates for mortgage refinance are on the sever rise! People used to say “oh well at least rates are still low”, despite all the other bad news. Well, even that is going away now, too! In just the past two weeks, the rate on a 30-year, fixed-rate mortgage has risen to 5.6 percent from 4.9 percent, ending a boom in refinance and purchase mortgage loans.
This is for real people! The refinance era is officially coming to a great end. Low rates have helped many people to refinance homes from 8% down to 4.75%. Low rates have also created greater incentive for people to buy homes. However, these artificially low rates have also severely hurt our economy. ONe of the things that is stilulating these higher mortgage rates, is that fact that the government is looked upn by investors, as a risky borrower, so interest rates get raised to make these risky investments more attractive to borrowers. It’s really that simple, yet so unnerving.
mortgage backed securites have taken a big hit
The Federal Reserve now finds itself in a box. It could try to lower rates by buying government debt, which ist has been talking about at length for some time now. I am not even going to go into how bad I think the Fed really is. Trust me, there is nothing “Federal” about them. The Government will owe even MORE money to the Fed, thus our taxes will go even higher.
And of course, what will the “Fed” do then, why…PRINT MORE MONEY! This in turn will get our country into even deeper inflationary problems.
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