Mortgage rates predictions can’t be trusted – at least, not completely – in this current uncertain economic environment. When life moved a slower pace, and when mortgages were less widespread, movements in mortgage interest rates predictions were much less significant than they are today.
Mortgage rate predictions depended simply on the interaction of the amount banks had to lend, and the number of prospective borrowers competing for the funds. There were many limitations on the supply of capital for mortgage lending in those times. Borrowers would save a sizeable deposit, or down payment, to demonstrate their ability to budget and save, before daring to apply for mortgage finance. At the end of the day, these limitations created a more stable environment for making mortgage rate predictions.
Over the past few decades, thinking has shifted radically, and so have mortgage interest rates predictions. A culture of owning a home with “nothing down” or very little equity has become the norm. A systemic increase of risk like this will inevitably impact on interest rates predictions.
Worse than that, when you feed ever-increasingly risky practices into a financial system, you make it increasingly likely that one new shock will bring the whole system down. No economy grows forever without the occasional correction, and it is naive to think that such a thing would ever occur – we must expect bad times every so often. As the economy slows and credit contracts, the mortgage interest rates wolf will be at the door, and in this case it is a particularly large wolf indeed!
It is the people who currently have a mortgage who stand to gain most from mortgage rate predictions. For many people, mortgage interest rate predictions are for lower rates than their current 30-year mortgage. If mortgage rates are lower than your current 30-year mortgage rate, then you should talk to a mortgage broker about refinancing.
Don’t be dismayed by the dire reports on TV. Refinancing your mortgage at today’s low interest rates, and fixing your repayments for 30 years, could be the smartest financial move you have ever made. If you have a higher mortgage payment than you need to have, you are just throwing money away. Make the temporary low interest rates into a permanent benefit by refinancing now. We have never seen such a level of political involvement in financial market decisions, and as a result we now have a rare golden opportunity to lock in a lifetime of benefit.
Mortgage rates predictions are always subject to variables beyond our control. Today’s global economic crisis and the associated worldwide political involvement in money markets has made mortgage rate predictions even less of a sure thing. While this may be so, you can be sure of one thing. You won’t see mortgage rates this low again for a long time. It is hard to imagine an easier way to reduce your mortgage repayments than refinancing at a lower rate of interest. If you are currently meeting your mortgage payments, this is a rare and valuable opportunity to reduce them dramatically.