Nationwide Home Mortgage Loan Company :: Mortgage Rates Predictions

Mortgage Rates Predictions: Are These Predictions Reliable?

Mortgage rates predictions are as reliable as Nostradamus’ predictions of the future. There are simply too many economic and political factors affecting mortgage rates that it is simply difficult even for a Ben Bernanke to guess how far and when rates will go up and down.

First-time borrowers interested in securing a mortgage to buy their dream home or people seeking to refinance their current mortgage, of course, want the rates to go as low as possible. A low mortgage rate would mean you would repay less each month over the span of the loan.

Rising inflation, rising foreclosure risks and write-down in house prices, credit squeeze, and plummeting dollar value are the economic factors that influence rise in mortgage rates predictions. Rising inflation is seen to increase mortgage rates because inflation rate is directly calculated into rates of lending industries including mortgages and credit cards.

If there are a huge number of foreclosures in the real estate market, buyers bargain for homes at prices lower than their full appraised values. This bargaining tendency increases lending security risks. And with house sales going below their book values, mortgage companies respond by posting high interest rates until the real estate industry stabilizes.

Falling dollar value also put pressure on the government to keep mortgage rates higher to entice invest capital to continue in the country.

Currently, the conflicting economic indicators seem to pull towards the same direction. Mortgage rate predictions have been, for a while, consistently upward.

However, because of Federal Election in November, mortgages are seen to be at their historically low levels. These levels are predicted to rise steeply after the November election.

However, because predicting mortgage rates are difficult and not absolutely accurate, you should instead focus your energy on finding a lending company or mortgage loan with cheapest loan rates rather than chasing interest rates based on mortgage rate predictions.

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