Over the past several months, you may have heard that the Federal Reserve lowered its interest rate and that mortgage lending rates have dropped to historic lows. How are mortgage rates affected by the Fed and what other factors can interest them? These and other questions can help you determine the best time to finance the purchase of a home. Here are 4 helpful FAQ’s that could influence your decision:
Mortgage Rates in Stockton, CA
- If the federal interest rate is “0”, shouldn’t your mortgage rate be close to that? The interest rate applied to the borrowing and lending of money between banks is referred to as the federal funds rate. This can impact the economy where employment, growth, and inflation are concerned. And while it can influence auto loans, credit cards, and mortgages, there is no direct correlation between the two.
- Does a lower US Treasury Bond yield mean that your mortgage rate will be lower? While there is a link between fixed mortgage rates and the US Treasury Bond, the bond is not the only financial instrument that can influence the interest rate on your mortgage.
- What other factors can have an influence on mortgage rates? Other factors that can influence the interest rate on your mortgage include:
- 10-year US Treasury note yields
- economic and political factors
- investor demand for mortgage-backed securities (MBS)
- When is the best time for you to pursue financing a home? Obviously, the future cannot be predicted with any certainty nor can anyone determine when mortgage rates will adjust. However, working with a reputable mortgage lender will enable you to make a well-informed decision about when you should pursue home financing. Many prospective home buyers make the mistake of starting to shop for a house before talking to a mortgage lender. In addition to helping you understand which types of loans are available, having that loan pre-approval letter from a lender will make you more appealing in the eyes of the home seller and realtors. The 5 most important reasons to talk to a lender first are:
- It gets the home seller’s attention.
- It helps you set realistic expectations.
- It helps you to know what your closing costs will be.
- You still have the ability to shop around for a lender.
- You’ll be finished with all that documentation and paperwork sooner.
Apply For a Mortgage at H.O.M.E. Lending
We are here to help you with your mortgage rates. Our experts will evaluate and recommend the best mortgage for your specific requirement to assist you save more on your home. For more information regarding home financing, we encourage you to call H.O.M.E. Lending at (209) 477-0262 today. Call us NOW!