The buzz in the mortgage market is that 30 conventional fixed rates are moving above 5% and will likely continue to rise through the spring. One reason is that since last year, the Fed has been buying large amounts of mortgage-backed securities. This action has artificially kept the mortgage rates down. That program is scheduled to end March 31, so this rate-lowering influence will go away. Also, as the economy picks up steam, stock prices will continue to rise making it necessary for the mortgage rates to rise in order to compete for investor dollars. HERE is a link to a recent CNN Money article that goes into more detail on these points.
With most lenders, if you think you may be close to refinancing or getting a mortgage on a home, you can lock a mortgage rate for as long as up to 90 days to protect yourself from the anticipated increase. If buying, you don’t even have to have selected a home yet in order to lock your rate. No one’s crystal ball is working well right now, so at least this can give you some peace of mind.
If you’d like to talk to a mortgage lending professional about this, I’ll be happy to recommend several so that you can get opinions and information from a variety of sources.
Don’t forget that the tax credits for first time or repeat home buyers have to be under contract by the end of April and closed by the end of June this year. I have several posts about these tax credits elsewhere on this blog.