Mortgage rates rose today based on optimism that Democrats and Republicans will come to an agreement before the fiscal cliff heads the country into higher taxes. Two principals to remember:
1) Good economic news = higher interest rates. Bad economic news – lower rates.
2) The market is anticipatory. Investors try to guess what’s up ahead.
So the bottom line is that there is optimism about good economic news ahead. If it turns out they’re wrong, rates will go down again. But even if that’s the case, it could be weeks before that happens.
Best Rates Today (depending on lender):
30-year fixed rates for conventional loans today: 3.375% to 3.5%
15-year fixed rates: 2.75% to 2.875%
30-year FHA and VA rates: 3.25% to 3.5%
With rates this good, you can’t go wrong by locking in to secure your rate. Looking at the past decade, these are fantastic rates for which to borrow money. Even if rates go down in the future, you’ve got a good deal; and if your purchase contract closes before you’ve had time to wait for rates to lower, you’re better off with locking. On the other hand, if they continue upward, you’ll be very happy you locked in.
