Current Mortgage Rate Fluctuations
We all tend to be prone to overreaction. All you need to do is turn on the news to find out the latest apocalypse du jour. Of course, the vast majority of these expected calamities that we get ourselves worked up about never in fact show up in our lives. Let's face it; we are a bunch of Chicken Little's running around shouting about the falling sky. One recent example of this is the media's incessant shouting about the skyrocketing of mortgage rates of late.
Well, relax a little my friend, because I am going to lay out for you that perhaps this hysteria is overblown, and you aren't going to have to remortgage your next house at 30% interest.
First of all, you must understand that while for a short period the rates on a 30 year fixed mortgage did indeed dip below 5%, you couldn't find anyone anywhere that knows anything about the mortgage industry that said this was going to be a long term sustainable rate. Furthermore, keep in mind that mortgage rates are always in flux and are continually moving around. The only thing that is certain is that going forward is that mortgage rates will fluctuate.
Second, it may be helpful to fill you in on what has caused the movement in the rates and what we can expect going forward. With the massive purchasing of mortgage-backed securities in many countries as well as plunging stock markets driving the rates of the bond market downward, we simply went through a period of abnormally low mortgage rates. However, the recovery is afoot. Several large banks are already beginning to pay back the bailout money they received. Also, the stock market seems to have stabilized to a significant extent.
So, what can you as a consumer do to mitigate having to deal with a quickly rising mortgage rate environment? Well, the first thing to consider is working with an independent broker instead of an employee at a bank. Simply put, a broker will have much more flexibility to relock a mortgage rate for you if a lower rate becomes available prior to your closing date. Conversely, a bank employee will normally not have this flexibility. This allows you the enviable position of being able to be protected against further rate hikes without having to commit yourself if rates go down.
Finally, if you have found the right property, avoid trying to wait for the "exact perfect" moment to secure your financing. You will do nothing but drive yourself crazy and potentially lose out on a property that would meet your needs perfectly.
If you weren't prone to overreaction, you wouldn't be a little thing we like to call "being human". But please, try to keep things in perspective. The media has an agenda, which is to put sensationalistic programming on so that you feel like you need to tune in.
Unfortunately, they don't tell you the whole story, which in many cases causes undue stress for people. Don't let this happen to you. Work with an experienced, objective mortgage broker to simplify your life and remove as much doubt and worry from your life as possible. Oh, and go have a pint as well. That always helps.
*article also submitted at ezinearticles*
Current Mortgage Rate Fluctuations
By: michael sterios
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