Interest Rates Dropping?

The team here at Badger Realty are always looking at the real estate and mortgage industry, locally(and nationally) or order to better serve our customers and clients. In a recent conversation with Scott Simons of Simons and Leoni Home Loans, from North Conway, New Hamsphire, there is a real possibility that the mortgage rates will be dropping soon!

Is your rate over 6.5%? Stay alert! We may see first mortgage rates make a sudden and dramatic drop. (Refi any one?) It appears the federal government has positioned itself to reclaim, the now privatized and ailing mortgage backed security giants, Fannie Mae, (Federal National Mortgage Association), and Freddie-Mac, (Federal Home Loan Mortgage Corporation Act). So what does this mean for mortgage rates? At present it is an unknown but the financial news networks are a buzzing that Wall Street's renewed confidence in mortgage backed securities may bring the investors back to the market and at lower margins, (and better rates for you). Analysts are predicting rates could fall a half a percent or more which could put the 30 year fixed at about 5.625% and the 15 year fixed as low as 4.875%. (This is only a prediction at this point - not current rates.) Currently, the going interest rate for first mortgages is margined about 2.5% over the 10 year treasury bond's yield. (Gov't Bond Yield + Investor Risk/Profit Margin = Market Rate.) Traditionally this margin is only about 1.75% over the 10 year's yield. The higher margins have been to set attract more investors, (capital to loan). So restored investor confidence may equal a great opportunity if your current rate is over 6.5% or you'd like to consider a 15 year amortization. (As a general rule a refinance may be beneficial if your rate will drop by 1% or more - AND - you intend to keep the property for at least three or more years.)
If you still have a strong equity position in your primary home, and think a refinance might benefit you, you may want to call your local mortgage lender! They can help you pre-determine at what rate and terms you would benefit and if you still have the needed equity and qualifications to move forward. For more information on how you might be able to save on your monthly mortgage payment, call your local mortgage lender or the team at Simons and Leoni Home Loans, North Conway, NH 03860 at 603-356-5959 or email HannahSullivan@SLHomeLoans.com or Badger Realty, 603-356-5757; info@BadgerRealty.com, serving your real estate needs in the Mt. Washington Valley of New Hampshire and Western Maine!