With mortgage interest rates matching or beating their record lows, there's never been a better time to finance a house. But will rates fall further?
“Could Mortgage Rates Hit 2 percent?” That’s the question posed by Marilyn Lewis of MSN Money after mortgage interest rates matched or beat their all-time record lows last week. 30 year fixed mortgages averaged 3.49 percent while 15 year fixed mortgages set a new record low at 2.77 percent. And rates could go lower thanks to a plan to buy $40 million in mortgage-backed by the Federal Reserve.
The Fed said last week it would buy $40 billion every month in mortgage-backed securities until the labor market improves substantially. The program, known on Wall Street as “QE3,” will likely lower interest rates for mortgages and also help some people refinance their home loans.
But will you soon be able to find a mortgage or refinance at only 2 percent? The experts aren’t so sure.
HousingWire and Bankrate.com both suggest an upcoming increase in the fees Fannie Mae and Freddie Mac charge lenders will flow through to borrowers, keeping rates higher than they otherwise might be. The Financial Times says rates won’t hit 2 percent because a heavy demand for mortgages means banks wont need to compete as hard for your money.
For more information (and some video) check out the original article on MSN Money. And if you’re looking for a new mortgage or a refinance, don’t forget our Mortgage Search. It can help you find the lowest local rates.