Home mortgage interest rates, and all loan rates, are based on rates set by the Federal Reserve. The banks use what is called the prime lending rate. This rate is used by banks as a basis for the interest rate they will charge individuals with the best credit ratings to borrow money. This has become important in the past few years as interest rates on such things as mortgages have been so low.
From 2002 to 2004, the prime lending rate was under five percent. In fact, there were times during this two-year period that the prime rate was right at four percent. This made people across the country look more favorably at buying their first home or refinancing an existing mortgage. However, all good things must end. We are in a period where the prime rate is increasing, and so are mortgage loan rates.
The prime rate, while still quite low, has been steadily increasing since 2004. This means that that locking in the best interest rates may be coming to an end. The time to act to get the best payments that have ever been available is now.
If you are buying your first home or are thinking about refinancing an existing mortgage, contact Downs Financial. We are a direct lender of mortgage loans. We have some of the most competitive rates in the industry. In addition, we are able to offer loans nationwide to people with all types of credit histories. In fact, about 80 percent of the people we work with have bad credit. Don't let these low interest rates pass you by when Downs Financial can help secure your future.