It was a positive week for 30 year fixed rates with 3 consecutive days of rate improvement, as various talking heads voiced expectation of a Fed Rate increase in the near future. While the Fed meets next eek, and is widely expected to hold rates steady, an increase in the Fed Funds Rate could come later this summer.
Why is a Fed rate increase good for 30 year fixed rates? Remember that the Fed Rate and long term mortgages are not directly correlated. A Fed Rate increase would be viewed as anti-inflationary. Inflation is bad news for mortgage bonds and hence mortgage rates. So an action to prevent further inflation would be received as welcome news in the bond market, and we could see mortgage rates improve.
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3 comments:
Matt,
When we bought our house, we got an FHA 30 year loan, at 6.25%...
With all the rates going down, do you recommend trying to refinance...do you think it would financially wise?
Yara-
6.25% is still a pretty awesome rate, but it never hurts to see if you can do better! Especially with the work you have done, you have surely increased your equity and LTV. I would call Chris Fox at F&B Financial (314.494.2388) and explain your current situation and see if he can't improve it!
Thanks for the tip
i definitely will give Chris a call!
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