Category Archives: Mortgage Interest Rates

Will Interest Rates Rise In 2015?

Federal Reserve chair recently hinted that rates may rise sometime this year. What might that mean to the Santa Clarita real estate market?

With exception of a minor hiccup in hiring last month due to unseasonably cold weather in other parts of the country, our national economic federalreservecondition has seen much improvement since the dark days of the so-called “Great Recession” that reared its ugly head in 2008.

“But what does this have to do with mortgage interest rates?”, you may ask. 

Interestingly enough, it all ties in together. Banks and mortgage lenders borrow money from the Federal Reserve who sets a “wholesale” base borrowing rate for lending institutions. From there, consumers are charged a “retail” rate that is usually a few points above (Based on credit rating, etc.). read more

Interest Rates Drop Back Below 4%….Again!

Home buyers should take this opportunity to leverage this incredible purchasing power.

It seems to have defied all expectations by major financial analysts who predicted that rates could jump as high as the mid 5% range by 2014. Amazing to see how those predictions Mortgage rates continue to dropturned out, as interest rates fell below 4% this week for the second time in a month.

So how did the analysts get it so wrong? If you remember, in early 2013 rates were down nearly to 3 and a half percent before taking a jump back as high as the mid 4’s by summer. This was a result on a selloff of mortgage-backed securities based on information from the Federal Reserve that they would consider reducing the monthly stimulus that had guaranteed mortgage stocks since November of 2008. The monthly stimulus added up to $85 billion. This practice is known as Quantitative Easing (QE). read more

Interest Rates Take Another Plunge

Mortgage rates at a near 52 week low for the second time in 2014.

It wasn’t so long ago that mortgage interest rates were at their lowest point in like, ever! Looking back at the spring of 2013, we saw rates below 4 percent and holding.Santa Clarita Real Estate Update

Then something happened that would shake up the mortgage world, if only just a tad. The Federal Reserve announced that they “may” reduce their $85 billion monthly stimulus in backing Mortgage-Backed Securities (MBS). This caused a very short-lived panic as some investors began selling off their own securities, thus compelling rates to jump into the 4’s. read more

What is an APR, and Why Is It Different From An Interest Rate?

Understanding how your loan works can possibly save you money in the long run.

Good news! As of close of business on July 1st of this year, fixed-rate mortgage interest rested at 4.14%.interestrates

In other news, even with a perfect credit score, this will still not be the interest rate you’ll end up with for your home loan.

There are a lot of factors that go into determining how high (or low) mortgage interest rates will go. The buying and selling of Mortgage-Backed Securities make up a large part of the “cost of lending money.” The simple explanation behind Mortgage-Backed Securites (MBS) is that your loan may be sold by your lender, along with a group of other loans, to a securities broker who will bundle them and sell them on the open market to investors, who make their money either from trading, or by money brought in through payments and equity. read more

Mortgage Rates Continue To Fall

Mixed economic news gives strength to bond market, which in turn helps lower loan rates.

Mortgage rates have dropped to their lowest point in 2014, with conventional fixed rate loans dropping to 4.16% as of Friday, May 16th. This news flies in the face of Mortgage rates continue to droppredictions made late last year by some financial analysts who said rates would be over 5% this year.

What is driving these rates downward?

Stocks and bonds have a lot to do with interest rates as financial investors have been making significant moves toward the bond market in light of mixed news about economic recovery. Bonds, while granting potentially smaller yields than stocks, are a safer investment. A stronger bond market will almost always drive interest rates downward. read more