Mortgage Interest Rates Expected to Increase
At the end of March, the Federal Reserve stopped buying mortgage-backed securities from Frannie Mae and Freddie Mac. What exactly does this mean for you, a home buyer? Well, it means that private investors now have complete control of the interest rates, and the amazing low rates we have been experiencing could very well be a thing of the past.
The good news is that interest rates did not immediately surge once the government backed out, and many economists are predicting a gradual rise throughout the summer and fall. Yet, a rise is eminent.
When you look at all of the contributing factors – 30-year interest rates under 5%, historically low home prices and the $8,000 tax credit – there has never been a better time to be a first-time home buyer. Unfortunately, what we are gathering is that these favorable conditions are going to come to an end very soon. The $8,000 tax credit expires April 30th, and there is basically no hope for an extension this time. Also, the low interest rates are expected to steadily rise. While home prices may remain low, the elimination of the other two factors will more than likely push first time buyers out of the market.
What is the solution? BUY NOW!!
You have to get a contract down on a home before April 30th in order to be eligible for the tax credit. If the tax credit is not that much of an incentive for you, then be sure to invest in your new home before the expected rise of the interest rates. Believe it or not, a good interest rate can drastically impact your monthly mortgage payment.
At Highland Homes, we have many different home financing options available. Contact one of our new home sales agents for detailed information on mortgages, interest rates, down payments, estimated monthly payments and any other questions you might have. You already know that we have some of the best values on Central Florida new homes, so let us help you take advantage of the low interest rates and the tax credit as well.
For more information about the Federal Reserve program, check out this article from the Philadelphia Inquirer.