Who would have thought mortgage rates would be as low as they are for as long as they have been? Either way, it's common knowledge at this point, at least with folks in the industry, that rates for conventional loans (loan amounts less than $417,000 in most areas of the country) are artificially low by somewhere between .5% and 1%. This is the case due to the fact that the Federal Reserve has been purchasing mortgage backed securities for several months now.
Well, the Fed's Mortgage Backed Securities Purchase Program is slated to end in March 2010. In theory, this could result in a very quick jump in rates of .5% to 1%. To put this in perspective, consider that a 1% rise in rates could add more than $150 to a monthly mortgage payment for a $25,000 30-year fixed-rate loan.
So, if you've been considering a refinance either to make improvements to your current home, pay off some outstanding debts or simply to reduce your monthly obligations, the window to these historically low rates may be closing.
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