Are Refinance Rates at 3-Year Lows?
That jobs report wasn’t expected to result in lower mortgage rates (rates have traditionally risen after jobs data like the one in the Feb. 7 report, but rates are not directly tied to that report), but on February 7 we saw best-execution rates offered as low as 3.125% on FHA home loans and VA mortgages.
What happened that week may or may not be followed by periods of upward momentum on the current rates; much depends on some variables that can’t be predicted with any reasonable degree of success. One great example? The coronavirus.
Believe it or not, the coronavirus and headlines about it did serve to affect mortgage rates. The jobs report mentioned above is a predictable release of data that may or may not serve to drive investors to safer havens.
And the week prior to the jobs report, some reporters were speculating that the Wuhan virus may have turned a corner and that things might not be so dire. However, there has not been an increase in the “it’s all getting better now” tide and the coronavirus issue continues to have an effect on the global economy.
Mortgage loan interest rates are affected by these things because investor behavior influences mortgage rates. When investors are worried about riskier stocks and move their funds into Treasury Bills or other safe havens, rates are affected.
Mortgage loan interest rates tend to move in the opposite direction of economic news; what’s good for the economy can hurt mortgage interest rates, what’s bad for the economy can improve them based on investor behavior.
If the low rates caught you by surprise, just keep working on your home loan and worry about the rates when you are ready to commit to the purchase of a specific home. You can work on getting improved credit scores which will improve the interest rate you are offered by the lender.
If you are not ready to commit to your home loan yet, the current mortgage loan interest rates won’t help or hurt you, but the credit repair portion of the equation is definitely something you can work on to get better rates offered to you when you are ready to buy.
Remember, FHA home loans have a low minimum required down payment (3.5%) and you can buy a condo, mobile home, existing construction suburban home, or even apply to have a home built for you on your own lot with an FHA One-Time Close construction loan. Ask your lender how even a first-time home buyer can apply for a construction loan with a low down payment.
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