Forecast On Mortgage Rates For 2015
Forecast On Mortgage Rates:
Mortgage rates have been extremely volatile the past several weeks. Last week’s announcement of the Non Farm Payroll report for February fueled mortgage rates to an all year high but the good news is that mortgage rates recovered quickly. This type of volatility draws great concerns for mortgage rates outlook for not just the second half of 2015 day to day. There has been constant talk and rumors that forecast on mortgage rates were that mortgage interest rates will start increasing and that the Federal Reserve Board will be raising interest rates. Rumors of the dim forecast on mortgage rates still does not affect home buyers. Home prices are going up nationwide due to the demand of housing and the low inventory.
Forecast On Mortgage Rates Still Low
Despite the volatility in the stock markets and mortgage markets, mortgage rates still remain low and it is not too late for homeowners to explore the idea of refinancing their current mortgage loans for a better rate or converting their FHA insured mortgage loans to a conventional loan to reduce or eliminate the pricey FHA annual mortgage insurance premium. Mortgage rates for conventional loans for prime borrowers still are just slightly below 4.0% according to data released by Freddie Mac last week. The 4% figure is an average of mortgage rates on conventional loans nationally for prime borrowers with credit scores of 740 FICO and those home buyers who are putting down 20% down payment on a home purchase or homeowners with at least 80% loan to value.
Federal Reserve Board And Forecast On Mortgage Rates
The Federal Reserve Board is planning on raising mortgage rates the second half of 2015 even though weak economic news and turmoil internationally. The Federal Reserve Board has been talking of raising interest rates year after year but this time around, it seems like they will take action. Talks of the Federal Reserve Board of raising interest rates is no surprise to the general public. Interest rates cannot remain this low forever. The interest rates increase is expected to be gradual and most folks are ready for this change.
Housing Market And Forecast On Mortgage Rates
Despite talks of rising interest rates, the housing market remain strong and the rumors of rising mortgage rates does not seem to deter home buyers. With the reduction of the annual FHA mortgage insurance premium from 1.35% to 0.85% and the comeback of the 3% down payment conventional mortgage loan program for first time home buyers by Fannie Mae and Freddie Mac, the home purchase market does not seem to be affected by the higher interest rates that is being projected. Homeowners needing to refinance their current mortgage loans and homeowners in the process of refinancing their current mortgage loans should consider locking their mortgage rates as soon as possible in the event if mortgage rates start spiraling up just like it did back in May 2013.
FHA Loans, VA Loans, and USDA Loans will definitely follow the path of conventional loans when interest rates go up, however, it will have a slower impact than conventional loans. Conventional mortgage rates have rapid volatility whereas government loans move at a slower pace, which is good news that mortgage rates on government loans will not go up 1.0% overnight. It is a possibility though.
Are Mortgage Rates Going Up In 2015?
Nobody has a crystal ball and even though the plan for the Federal Reserve Board is to raise interest rates in the second half of 2015, they can postpone that decision if there is market turmoil or other factors that may come into play between now and their planned date. Mortgage rates can go up, stay the same, or even go down in 2015. Until the time comes, nobody knows and the market and economy will dictate whether rates will go up and how much it will increase.
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