Today’s Mortgage Commentary, The affect of “Brexit” on Mortgage Rates – July 6, 2016
Mortgage Rates Drop to New Historical Lows…again!
If you are looking to take advantage of low mortgage rates, you may want to act fast. Mortgage Rates have continued to decline due to the uncertainty in the market caused by “Brexit” – short for “British exit” from the from the European Union. This decision from one of our largest economic and political allies affects the global financial markets. The ripple affect and fall out that could be driven from this decision is causing bankers, economists and investors to seek safe haven to preserve capital from riskier investments.
When uncertainty happens in the markets, typically you will see an influx of cash from the stock market into commodities (like gold) and US treasury bonds (10 yr Bond). When the supply of US treasury bonds goes up, the yield comes down and this is almost directly tied to long term fixed rates such as the 30 year fixed mortgage, the 15 year fixed rate mortgage and 10 year fixed rate mortgage.
What are Today’s Mortgage Rates?
The 30 year fixed rate mortgage is arguably the most popular mortgage. The rates on this mortgage average 3.48 percent last week which was a slight decrease from the 3.64 average that was seen by this type of loan the previous week. When compared to last year’s numbers, these rates are very low. Last year, in July of 2015 the 30 year fixed rate mortgage averaged at 4.08 percent.
While you may not be pleased with the performance of your 401k or stock profile, most financial advisors will tell you that this is a short term disruption and to wait it out. Just the opposite applies when it comes to home loan financing, when disruption happens in the market it is the ideal opportunity to act and lock in a low mortgage rate. At Hunter Lending, we have been serving the Denver market for over 11 years as a mortgage broker. The advantage is that we have a dozen investors that we can compare when helping you to find the best mortgage options.