Where Will Current Mortgage Interest Rates Go?

By Jim Micheals

Secrets about mortgage interest rates that the lenders don’t want you to know! Looking to buy a home, you won’t want to miss this.

As our economy slowly climbs out of the recent recession, mortgage rates are slowly increasing and are expected to continue to rise slowly over at least the next 24 months. While there is not expected to be more than a 1.5% increase over this time period, it is important for potential mortgage borrowers to realize that they will pay more for their home in the long run now than they might have a year ago.

Consumers Were Wise to Wait to Buy New Homes

To some, this might appear to be a negative consequence of waiting out the recession to purchase. Really, potential borrowers who waited to finance a home have made a good decision. Over the last year, the entire lending industry has fallen under the close scrutiny for improper and unfair lending practices for which their customers are now paying. Regardless of the mortgage interest rate granted to home buyers a year ago, if they bought more home than they could easily afford, there is a high likelihood that they are now experiencing financial difficulties as a result.

Lending Reforms Will Benefit Consumers

Reformed lending will cost consumers a little bit more in rising interest rates, however gone are the outrageous fees and loan costs. It is going to take several years for the reforms put in place over the last year to start to really stabilize the mortgage industry.

Interest Rates Will Stabilize When Consumers Start Buying Homes

For this reason, consumers are still shy about the idea of purchasing a home right now. This trend is expected to reverse soon and mortgage rates are expected to level out at around 6% sometime in the next two years. The hope of the Federal Reserve and the mortgage lending industry, is that people will be more trusting and ready to buy new homes by the time the rates settle.

Lower Interest Rates are Coming Soon

At that point, a slow drop in the interest rate can probably be expected. The real test however, is continued economic improvement. Without steady improvement, it is unlikely that the rates will begin to drop as predicted.

Related posts:

1. Where Are Mortgage Rates Headed?
2. How Do I Track Current Mortgage Rates?
3. Where Will Current Mortgage Interest Rates Go?
4. What is the Trend on Current Mortgage Rates?
5. Why Are Mortgage Interest Rates So Unstable?