Understanding Mortgage Rates | dripp inc | Home Equity | Refinancing and Remortgage Guide

Good Afternoon,

The news is in today and we will most likely see mortgage interest rates stay relatively the same at yesterday’s levels. Considering the news that came out, we kind of lucked out, for today at least. You can still take advantage of a great program, but it will not last too long.

Here’s the inside Dripp…

Fannie Mae’s earnings report was 3 times worse than Wall Street expected. More mortgages have been defaulting, which pushed the mortgage giant’s losses to $2.3 Billion. Because of these tremendous losses Fannie Mae will increase their fees, which will increase interest rates as well. The spread between the 10-year Bond and mortgage rates is getting wider and wider. We will keep you updated…

This unsurprising news from Fannie Mae was balanced by good news about inflationary concerns. The dollar improved its strength and oil prices decreased again. This is good news for the bond market, which is why the disastrous Fannie Mae news did not spark an immediate interest rate spike.

The Productivity and Cost index came in lower than expected this morning. Forecasts were calling for an increase in employee productivity, but the opposite resulted. Wages have slowed down to keep companies above water and employees are producing less per hour.

Simply Put: The good news is that oil prices decreased again and the value of the dollar has improved. A lower inflationary level helps the bond market, which usually helps interest rates. However, Fannie Mae reported a humongous loss during the second quarter and will have to increase fees and interest rates to help its survival. We suggest locking in your interest rates as soon as possible to avoid the unknown changes ahead.
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