Flight to safety in financial markets can be your huge opportunity
Nobody predicted this. The pundits are all scratching their heads. The markets, all of the markets are in complete turmoil and confusion. If you are thinking about buying a house, investment property, or refinancing your current mortgage, now is the time to act. Interest rates have dropped from 4% to 3.5% for 30 year fixed in just 4 weeks. Jumbo loans continue to defy normal trends and are about .1% lower than conventional mortgages.
That half percent drop works out to over $200 per month in your mortgage interest payment, or two really nice nights out on La Cienega…every month. The next question every astute investor is asking – where to from here. Since all …100%… of the astute investors have been wrong over the past 60 days, your humble correspondent will not give you a prediction about the future direction of mortgage interest rates. Instead, let’s talk parameters.
On November 30th 2012 rates hit 3.36%, the lowest ever recorded. Rates fluxuated around 3.5% from Aug 31 to May 20. From this information you could extrapolate the following. Rates could stay this low for 8 months again. Rates are very unlikely to drop to new all time lows. Getting an interest rate of 3.5% would be a huge financial benefit to you and your family even if rates dropped a bit under this.
Will the low rates still be here in 60 days?
How long do you have, really? Mortgage rates are tied to the bond rate. Bond interest rates drop when the market is nervous about the future of the national or world financial condition. Bonds are safer than stocks, commodities, or other investments, so money flows out of risk investment vehicles into safety. With more demand, the price of bonds goes up which means the interest rate drops.
How long will the investment community be nervous about the things that are making them nervous today: Oil prices, other commodity prices, China, Brazil, Europe, US debt, presidential elections? While there is nothing on the horizon that would suggest that any of those issues is likely to improve dramatically in the short term, markets sometimes move into a more positive mood when there is no more bad news.
So, it is very unlikely that oil will drop below current levels. China seems unlikely to spiral into recession, but may remain flat. Oversupply of commodities will usually wash out within months as companies cut back production or go out of business. The US annual deficit is falling due to great tax receipts.
The bottom line
There is no reason to wait to refinance or borrow to buy a home. The time to act is immediately. If you aren’t ready to lock in a rate, you may have weeks or even months to get mortgage rates around 3.5%. However, the current market is very volatile, and a couple of good news headlines could take rates back to 4% as fast as they dropped to 3.5%….6 weeks.
Bill Rayman has been through these cycles for over 15 years. You can take advantage of his knowledge, experience, and massive resources for free. There are no fees or obligations when you call a mortgage broker. Bill’s only client is you. His only hope of getting paid is to find you the very best loan on the market based on your specific needs and circumstances.
Call Bill today to lock in these amazing rates – (424) 354-5325