As a mortgage loan processor, I receive flash messages every day that keep me abreast of the ever-changing interest rate. My brain does not naturally think in numbers, so the terms better and worse, as in “rate decrease for the better” or “rate increase for the worse” provide enough information for that day’s trend, because the rate changes are small albeit steady. Currently those fluctuations are ranging between 4.5 and 4.75 percent for a conventional purchase mortgage loan. Kiplinger, experts in economic forecasting, project rates to reach 5 percent by the end of 2018.
For perspective, one only has to look back in time. I recall my parent’s oft spoken frustration about extreme interest rates in the late 1970’s being so high that they could not afford to buy a first home. As a result of those unaffordable rates, our family of five was stuck in a three bedroom apartment. According to a Wall Street Journal historical report the prime rate or chief factor affecting mortgage interest rates, reached 15.25 percent on December 2, 1979 and would continue the devastating trend culminating in an all-time high of 21.5 percent the following December.
During that same time, America was dealing with a fuel shortage. How well I recall those early mornings awaiting the school bus and watching the long line of cars waiting to fuel up, stretching from the gas station for ¼ mile or more down Yorba Linda Boulevard in Orange County, California.
Thankfully, times have changed for the better and families can more easily afford a home of their own with the help of Fannie Mae and Freddie Mac government sponsored loans and historically low interest rates that have become the norm. Although fuel prices are no longer .60 per gallon, there is no per-car-limit on fuel and gas stations are open seven days a week.
Yes, interest rates are on the rise, but opportunity still abounds for affordable loans, including refinance options. For homeowners 62 years of age or older, a home equity conversion loan (HECM) is well worth a look, enabling you to eliminate your mortgage payment and withdraw equity and turn it into cash you can spend now. VA loans and USDA loans are under-utilized fantastic loans for those who qualify. Call our loan experts at A Plus Mortgage today and we will help you to gain perspective on the loans available to you and your family.
- Kiplinger: Interest Rates Gradually Headed Higher; https://www.kiplinger.com/article/business/T019-C000-S010-interest-rate-forecast.html
- Wall Street Journal: Prime Rate History; http://www.fedprimerate.com/wall_street_journal_prime_rate_history.html
- The Mortgage Reports: May 2018 Mortgage Rates Forecast; https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional