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Fluctuating Mortgage Rates Result in a Refinancing Craze

Fluctuating Mortgage Rates Result in a Refinancing Craze

Mortgage rates reached their lowest point in 2014 last week, dipping below 4 percent to 3.97 percent (on average for a 30-year fixed mortgage). The dip in rates was a direct result of the commotion that seized financial markets and caused stock prices and bond yields to drastically fall.

These fluctuating rates made the opportunity for refinancing seem too good to be true, and according to Josh Boak and Alex Veiga of the Associated Press, “Ultra-low rates do carry risks as well as opportunities. Charges and fees can shortchange refinancers who are focused only on the potential savings. And falling rates are often associated with the broader risk of an economic slowdown that could eventually reduce the income that some people have to pay their mortgages.”

Because the rates dipped so low, and due to the current mortgage market, many homeowners took this as a sign that it was time to refinance, before interest rates go up again.

The swift fall of interest rates came as a surprise as many assumed rates would begin to increase (to around 6 percent) due to the Federal Reserve raising its key short-term rate next year, which would result in overall higher mortgage rates. The rates dropped to their lowest point however because investors put their money in the U.S. Treasury, effectively raising prices on government bonds, causing their yields to fall.

Don’t expect to see these types of rates again soon, or ever as this week already mortgage rates have increased (minimally, but they are still on the rise).

For more information regarding Mortgage Loans and Rates call us today: at (888) 277-1697!

CELTIC BANK is committed to offering the best selection of mortgage loans geared to meet your specific financial circumstances. With a range of choices, we give you the freedom and flexibility to build your dream home, whether it’s upgrading your current residence or purchasing a new one.

Celtic Bank is also an awarded SBA Lender of the Year with a history of successful history of partnerships with small business owners. Through our SBA loansasset-based loansconstruction financeand equipment financing, we provide the financial framework your company needs to grow and succeed.

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