This is my Friday interest rate update. The chart below shows a clear decline in the value of mortgage-backed securities. A decline in bond prices does the opposite for interest rates. Rates tend to increase when bond prices decrease. Three weeks ago when QE3 was announced we experienced a sharp decrease in rates. Three weeks later the market is absorbing the Fed’s bond purchasing program and the market has stabilized. I see this trend continuing in the future. I do not see rate dropping very much and I do not see rate increasing very much. The question I get often in a market like we are currently in is this. When should i lock in my rate? My answer is always the same. If you like the savings you are getting off the current rates you should lock. Do not try to play the market because things can change quickly. I advise my clients to lock on certainty, not future assumption. Most of the time my clients take my advice. Start saving today based of real numbers and move on to other important things in life. Happy Friday!
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