Fence Sitter Alert: Don't expect mortgage rates to stay this low forever!

Are you, or someone you know, sitting on the fence about buying a home or refinancing the one you're in, waiting to see if mortgage rates drop even further?

Well, here's why smart home buyers and homeowners looking to refinance are taking advantage of today's attractive mortgage rates right now.

First off, rates are already at historically low levels. The reason they got there is the Federal Reserve, our country's central bank, has been purchasing huge amounts of Mortgage Backed Securities. This keeps their prices up... and mortgage rates DOWN! In fact, ever since the Fed's buying program began in January, mortgage rates have stayed in the historically low range everyone's excited about.

The Fed is doing this to help the housing market recover by making mortgages more affordable. But they committed to buying over $1 trillion worth of Mortgage Backed Securities only through the end of this year. So please note: the Fed has already spent over $700 billion of that money and the end of the year is only four months away!

One more thing. The Fed is also buying Treasuries to keep their prices up and yields (rates) down. This keeps mortgage rates low because Treasury rates need to stay below mortgages. But the Fed will stop buying Treasuries at the end of October! After that, the yields (rates) on Treasuries could go up, which could send mortgage rates up the last two months of the year.

Bottom line? There is now an unprecedented opportunity to buy or refinance a home at exceptionally low mortgage rates. But these rates are not likely to go lower... AND, because of the Fed's publicly stated policies, the rates we're seeing now may hold just a few more months!

Please let me know if I can be of help.... and have a great day!

~ Courtesy of Tim Lucas, Golf Savings Bank, TLucas@GolfSavingsBank.com, 425.681.3859