Home Buying in 11798>Question Details

Jose Sanchez, Home Buyer in Farmingdale, NY

How have interest rates been? Does anyone know how much longer they will be this low?

Asked by Jose Sanchez, Farmingdale, NY Tue Mar 5, 2013

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Jose, the truth is no one knows exactly when rates will increase. They increased a bit a couple weeks ago, but overall, rates are at historic lows. The general thinking is that they will begin to increase gradually, maybe within the next year or so.

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
5 votes Thank Flag Link Tue Mar 5, 2013
Hi Jose,

Interest rates are at historic lows and home prices are still very attractive. However, with rates and prices so low, they have no where to go but up. In fact, prices in many areas are already moving upl and rates will eventually follow. No one really knows when this will happen. But the one thing most experts agree on is this:now is the perfect time to buy a home. If you're seriously considering buying a home, then your first step should be to get preapproved by a licensed and highly recommended loan officer at a reputable direct lender. The preapproval is free and will include a complete review of your financial and credit profile to determine the best mortgage product to help you make your purchase as well as expected interest rate, payments, terms and conditions. I have extensive experience helping first time buyers become successful homeowners with affordable fixed rate mortgages throughout NYC and the suburbs. My main office is in nearby Syosset. For more info, I can be reached directly at 917.699.0183.

I value your feedback. Please hit the thumbs up, if my reply was helpful.

Michael Denniston l Cell: (917) 699-0183
Residential Home Funding, Corp.
Licensed Mortgage Loan Originator l Sales Manager
6901 Jericho Turnpike Ste. 219 | Syosset, NY 11791
Main: (516) 605-1733 | Fax: (888) 881-2557
NMLS # 24076 | Company NMLS # 34973
Mdenniston@RHFunding.com
http://www.rhfunding.com
.
1 vote Thank Flag Link Tue Mar 5, 2013
Nobody knows how long rates will stay down. If they say they do, don't believe them. They are just guessing
1 vote Thank Flag Link Tue Mar 5, 2013
Keep in mind that rates fluctuate daily; unfortunately none of us can predict the future, therefore none of us really knows how long the rates will remain on the low side....
0 votes Thank Flag Link Tue Mar 5, 2013
Rates are linked to many variables, especially long-term inflation expectations. An oversimplified formula of what variables are factored in is mortgage interest rate = FFR + inflation expectations premium + risk premium, where FFR is the federal funds rate. The risk premium can be a function of the homeowner's own profile (income, credit history), a function of prevailing default/delinquency rates and risk from error in the inflation expectation. Supply and demand is another basic determinant of mortgage rates. If a lender is to sell a loan, rates must be attractive enough compared to that of other investments of comparable risk.


Supply and Demand

So, if the 10-year treasury note is such a competitor of mortgage securities, what drives its rate? The U.S. government's need to raise cash can drive it up to attract more investors. Another government's needing a safe place to store its surplus can drive it down. A drop in confidence in the U.S. government or fear of inflation can drive it up. A fear of other equities can cause a flood into government securities. Higher returns in developing countries can cause an exodus from T-notes.
0 votes Thank Flag Link Tue Mar 5, 2013
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