Summer Could Bring 45 Mortgage Rates

05.24.10 | FL News Team

Home buyers could see mortgage rates falling as low as four-point-five-percent this summer. That's a prediction reported by "The Wall Street Journal." Most in the home loan industry expected rates to jump as the Federal Reserve turned off the tap, ending a one-and-a-quarter-trillion dollar mortgage-securities purchase program.

 The "Journal" says financial problems in Europe have, instead, caused interest rates to drop instead of rise as investors pump their cash in to the U.S. bond market. Homebuyers are currently seeing rates of five percent and lower and savvy shoppers are locking in 30-year-fixed-rate loans closer to four percent.

 The lower rates could help buyers who couldn't qualify for a mortgage at a higher rate. Others might discover they can buy a slightly higher-priced home or get that swimming pool they always wanted. A one-percent decline in a mortgage rate reduces the monthly payment on a 400-thousand dollar loan by about 250 dollars.