Don't Miss the Mortgage Finance Boat

A Home Buying Article Contributed by Elizabeth Fox-Wise

Mortgage Finance Interest Rates are at an All Time Low

The 2000s have seen record low mortgage finance interest rates. In 2001, it was predicted that the mortgage finance rate could not go any lower and was about to start going back up. But that never happened.

The soft economy in America during 2004 led to the Federal Government lowering interest rates several times during the year as an attempt to spur the economy. Loaning money at low interest rates has always been a common way for the US Government to get more money back into the hands of the people, if only temporarily, so that money will move through the economy, goods will be sold and jobs will be created. The hope is that the temporary help of lowering the interest rate will keep the economy afloat long enough for it to make it owns natural recovery.

With the decrease in the interest rates, the mortgage finance rate followed suit. In October of 2004 it was possible to secure a thirty year fixed mortgage for a finance rate as low as 5% and fifteen year fixed mortgages were carrying a low 3.5% mortgage finance rate.

Therefore Mortgage Finance Applications Hit an All Time High

I guess it could be said that the government's plan worked, to an extent. Mortgage finance applications hit a record high in 2004 as millions of Americans scrambled to find a home and secure mortgage financing before the finance rates climb back up again.

Homes being bought means more work for contractors doing repairs and improvements, more goods being purchases to furnish and decorate the home, and, as the Government had hoped, more money flowing through the US economy.

People who had been considering home ownership, realized they had to act now if they wanted to get in on the record low mortgage finance rates.

Mortgage Finance Rates Will Not Stay Low Forever

Although we have been saying that these low interest rates will not be around forever for several years now, this time it really must be coming to an end. There is no way that the Government can continue loaning money at such low rates.

Now that the Presidential election is over, it is expected that the Federal Government will begin raising rates before the end of the year. Economists are predicting that we will see mortgage finance rate increases before 2004 is over and that they will continue to rise throughout 2005.

Therefore, if you have held off on seeking financing for a mortgage because you are expecting rates to come down even lower, you probably should not wait any longer. Odds are against you that mortgage finance rates will be offered lower than today's rate, any time in the near future. Once mortgage finance rates begin to climb, they will probably stay on a slow and steady increase.

If you wait too long to secure financing for a mortgage loan you may have missed the boat and missed the opportunity to lock in your mortgage at record low interest rates.