The markets are reacting very favorably to recent announcements by Barack Obama and The Federal Reserve. As a result we are going to see very good mortgage rates today! This could be great news for those planning to purchase or hoping to refinance into a lower rate in order to hunker down during this economic crisis.
Yesterday's announcement of President Elect Obama's economic team and this morning's announcement of a new plan by the Federal Reserve to purchase securities backed by mortgages and other assets. The plan is designed to improve the flow of credit, which is like the oil that helps the gears of our economy to turn.
This news has given Mortgage Backed Securities a big bump in value. Most mortgage rates are derived from the value of MBS so this is very good news!
We mentioned last week on our radio show that the value of MBS was being squeezed between two powerful factors. One was the 200-day moving average which was keeping the value from dropping too far. The other was a "falling trend line" which was keeping the value from going too high. The two lines were converging toward the end of last week and we knew there was going to be a break out to one direction or the other.
Rates were either going to get much better or much worse very soon. Of course, we were hoping for good news but the volatility of late has made it tough to predict much of anything. We are very happy to see it go this way. Having said that, we never know how long a rally like this will last so we are most likely going to encourage our clients to lock in to these rates while we know they are here.
We take our clients mortgages under management. Then, we watch and wait ready to pounce on opportunities like these. We are currently querying our database for those who will benefit.
Please do not hesitate to contact us so we can see if we can improve your payment and/or get you into a stable, more favorable loan.
By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating or keeping your home as an investment and buying a new primary residence, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com
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