Tuesday, January 19, 2010

Interest Rates Going Up?

Maybe, but not right away. By the end of March the Federal Reserve will no longer be purchasing mortgages directly from Fannie Mae and Freddie Mac. These are the quasi-governmental financial institutions that provide liquidity to the residential real estate market by purchasing conforming home loans from financial institutions such as mortgage brokers and mortgage bankers.

BUT, it is very likely that when the Federal Reserve purchase program is ended (and it will be) that mortgage interest rates will begin to rise. How much? Now, that is the question. So, if you are considering a home purchase, it may be in your interest to push your time frame forward. Do this only, however, if it makes sense. I don't think you should ever "step out" early unless it makes financial sense to do so and is achievable.

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