Okay, so the subject line is long – but, believe it or not I cut it short. It could have been, “First Time Home Buyers can couple $8000 Tax Credit and Low Interest Rates and high inventories to buy Longwood Real Estate” We are seeing an unbelievable ‘perfect storm’ for buyers! Beware though – when it comes to mortgage rates, sometimes it’s better to “act now”… and no, that isn’t just salesmanship – its the difference between a rate in the 4% range and the 5% [or even 6%] range. Granted, all of these rates are historically low, but why settle for a 6-percenter when you can possible get a 4-percenter – even for an Orlando FHA Loan.
Last Tuesday, mortgage rates plummeted to their lowest levels in four years. Now, I love when mortgage hacks are right for the wrong reasons – don’t you? Many have pontificated that it was because the FED lowered that pesky FED Funds Rate – but if you have been a reader for any length of time you know more than they do because you know that long-term mortgage bonds frequently move in the opposite direction as the FED decisions. [I will not go into why here in this post.] It happened because the Fed said it would “employ all available tools” to resuscitate the US economy.
The next day, however, the markets had second thoughts.
After the sugar-high of this statement, the markets began considering the long-term implications of a near-zero percent Fed Funds Rate and the cumulative cost of government intervention to-date. Suddenly traders grew afraid that government action would devalue the dollar and lead to inflation — the enemy of low Longwood mortgage rates. [Okay, so I couldn't help myself - I went into why.]
As a result, that nice dip in rates – didn’t last… again. By the end of the day, mortgage rates were higher by as much as a .500% and nearly all of Tuesday’s big gains were erased and Longwood home loan rates went right back up to where they had been.
In hindsight, the reversal Wednesday wasn’t all that surprising — it’s the same trading pattern we’ve seen twice already this year.
- The first time was after the Fed’s “surprise” rate cut in January
- The second time was after the federal takeover of Fannie Mae and Freddie Mac in September.
Sharp rate drops tend to be followed by immediate bounce-backs, it seems.
What can be learned from this? Get your ducks lined up if you intend on wanting to be able to pounce the next time Longwood mortgage rates fall. I had a boat-load of people call but wanted to think about it. I don’t fault a person for wanting to ponder things a bit before making a decision – I do it. Unfortunately the marketplace could care less and those that hesitate – pay more. While those that locked at the first opportunity to save money are sitting pretty today, the rest that “waited for rates to go lower” are likely kicking themselves about it.
Does this mean you missed it? Yes and No.
Call me [407-377-0500 x 210] and join my group of Longwood real estate buyers and those seeking a Longwood refinance who have gotten their paperwork in order to be able to get a low Longwood interest rate the next time it spikes lower.
Going forward, mortgage rates may fall, or they may not – but we’ve now seen the pattern 3 times now — when mortgage rates plunge like they did, they rarely stay that low for long. Lets get your finger on the trigger, get in and get locked as soon as possible.
Sleeping on it for even one night may end up costing you dearly. Don’t be that buyer or refinance candidate.
(Image courtesy: The New York Times)
All Around Good Guy
153 Parliament Loop
Lake Mary, Florida, 32746
Work: 407 377 0500 x 210
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