2 reasons mortgage rates could rise in 2021
If you’re thinking about refinancing your home at the lowest rate possible, your window may be closing. The coronavirus pandemic has made refinancing your home more attractive — and affordable — but things could change quickly in the next few months.
To ensure you're getting low mortgage rates, get started on your refinancing application today.
Mortgage rates have hit historic lows, thanks to actions by the Federal Reserve in March 2020 to help strengthen the economy amid the pandemic. Given this news, it's no surprise mortgage refinances are booming. Homeowners want to snag a better mortgage rate, mortgage loan term, and lower their monthly payment in the process.
However, the Federal Housing Finance Agency's new adverse market fee, which is equal to 0.5% of a total refinance loan has already made refinancing more expensive. As of Dec. 1, all consumers who refinance their mortgage loan with a balance of over $125,000 have to pay an additional fee. And this could be just the tip of the iceberg.
Will mortgage rates rise?
If you want to avoid even more costs (and headaches), then you may want to refinance your home now. Here are two reasons mortgage rates could rise soon:
- Economic recovery
- Distribution of COVID-19 vaccines
1. Economic recovery
Harvard Business Review is reporting that the global economy is recovering faster than anticipated. They speculate that at least part of the reason the economy is recovering so quickly is that many fears, including the next Great Depression, never happened. Additionally, while unemployment rates did increase, it’s lower than experts anticipated.
The housing market hardly suffered, with sales and listings remaining steady. While the Federal Reserve predicted that they would maintain their rates at near-zero rates through 2023, an improving economy could change this.
It’s crucial to work to qualify for the lowest mortgage rates possible.
2. Distribution of COVID-19 vaccines
The potential of a viable coronavirus vaccine did encourage a slight increase in mortgage rates the week after Pfizer and BioNTech announced on Nov. 18 their Phase 3 trial had concluded. their the announcement. Now, as people in the United States are being administered the vaccine, it's likely that consumer and investor confidence will grow -- and mortgage rates could continue to rise with it.
While most financial experts agree that the Federal Reserve isn’t likely to raise baseline mortgage rates any time soon, mortgage rates could still move away from record lows over the next few weeks and months.
If a mortgage refinance is an option, take some time now to research so you can maximize your savings.
About the Author
Ryan Christensen
Responsive, Responsible and Resourceful - How Real Estate Should Be. This is the foundation of our continued success: responsive service, providing accurate and timely information, and demystifying the process. 100% of my business is referral based because I listen to my clients' needs and exceed their expectations. As a full-time real estate broker, I am the best advocate for both my buyers and sellers. I am always available, regardless of the time of day.
Being a native Southern Californian is a tremendous advantage. I know the area. Time is more valuable than money, but neither can be wasted. And, I'm a fan of hard work. My clients can enjoy their home buying and/or selling experience because I provide a trusting, focused, straightforward approach. I look forward to helping you achieve your goals and find joy in homeownership.
I am both a licensed Real Estate and Mortgage Broker. Others choose to concentrate on one or the other. I provide a higher level of service and expertise than those who do not obtain this dual skill set, which differentiates me from other service providers. My decisions and advice are based solely on what is in the best interest of my clients. I use Real Estate Sales as a tool to make sure my clients get the home that meets or exceeds their needs. As a Mortgage Broker, I search for the best loans so I can offer lower rates and pricing than my financing competition. This certainly IS in the client's best interest.