Interest Rates Heading to 5%!

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interest rates

You read it right folks. Interest rates on a 30-year fixed-rate mortgage, according to a Market Watch article published on March 27th, are expected to be at 5% by year’s end. Anyone in the purchase market for a home had better act NOW before the interest rates spike even more. I have been reporting this to you since late November, and well into 2022. The average rate as of the week ending March 24 was 4.42%, which is a 26 basis point from the previous week. There are several takeaways that the average consumer needs to keep borne in mind:

1) Home values have experienced an uptick in the last 18 months; however, any uptick in home values will be compensated for by interest rate increases. The logic is simple. During the times when home values were hyper-inflated in the 1990s, the housing market over-heated and many mortgage loans that had the possibility of negative amortization harmed borrowers. This led to various regulatory acts, including the Dodd-Frank Act. We no longer have loans like this available, however, NOW is the time for you to call 7th Level Mortgage to pre-qualify for your mortgage loan. I recommend utilizing their lock and shop program so your rate will be safe from increases.

2) Inflation is, as home values, on the increase. Many people that are living on fixed incomes need to call 7th Level Mortgage today so they can get rid of extraneous credit card debt, car loans, and other unsecured loans that in many cases are not fixed. That subjects the average consumer to payments that can vary month in and month out. To coin a phrase that’s all the rage, everything is on the way up, including gas, food, medications, and the ones that are feeling the pinch are our seniors that, although received a 5.9% increase in COLA for Social Security, got clobbered with an increase from $148.00 per month for Medicare Part B coverage to $170.00. While a $22.00 increase may not seem like much for some, this increase could cause people to choose between housing, food, and/or medications.

3) Rate increases that were predicted by many investors and lenders. The central bank hiked rates for the first time since 2018 earlier this month and the expectation is that these rate increases will continue through the end of this calendar year. If a borrower buys a home now, they would find a $300 increase in mortgage payments over this same time in 2021. Waiting any longer could be disastrous for future housing and financial planning, so I urge you to call 7th Level Mortgage TODAY!

4) In my many years in this profession, I have observed that many borrowers become penny wise and dollar foolish. They don’t always look at the big picture. There is no such thing as non-conforming lending in the legitimate market anymore and any lender who is offering mortgages that fit this paradigm needs to be looked at with the proverbial “hairy eyeball”. There is no quick fix for financial problems; however, there IS 7th Level Mortgage. The professional loan officers, processors, underwriters, and personnel in the other departments exist for one reason and one reason only: professional help, guidance, and processing. This affords you a superior level of service.

5) Another factor is when we had a market like this, we didn’t have a situation in Europe as we do now. With the Russian/Ukrainian situation still being unresolved, this makes for a stock market that will be on the increase, but because the stock market likes unpredictability because there is more money to be made based on risk, this market is a good indicator of which way rates will head both in the long term and short term.

Finally, I urge you to read over my other blog postings about the tenuous nature of this market. Things can change in the twinkling of an eye. These changes can occur very rapidly and unpredictably. There is a simple solution that can ease your tension, worries, and fears…CALL 7TH LEVEL MORTGAGE TODAY!! They are eagerly awaiting your call and will make every effort to custom design a mortgage plan that will fit your particular needs and objectives.