It is hard to believe that 2015 is coming to a close. In a few short weeks 2016 will be upon us. Over the last few weeks we have received a number of phone calls and inquiries from potential home buyers questioning the overall direction of California FHA mortgage interest rates. If you are seeking a California FHA loan we strongly suggest understanding where mortgage rates have been and where they are likely going.
Fortunately, there is a great predictor of mortgage rates – the 10 year treasury rate yield. You can track the 10 year yield here. As the 10 year treasury rate yield goes, so go mortgage rates. In fact, over the last 35 years the 10 year yield and the average 30 year fixed mortgage rate have been strongly tied. There are a number of correlational studies that show the importance of this.
In the coming weeks we will learn much more about the 2016 FHA home loan limits for California as well as the direction of mortgage interest rates. The Federal Reserve Bank will meet in December 2015 and will decide if overnight interest rates will rise. If the Feds determine that interest rates should go up there is a very strong possibility that mortgage rates will go up.
Even if this happens, it does not mean you should not consider buying a home in California. Even if the Federal Reserve Bank raises interest rates it does not mean they are going to go up drastically in a short amount of time. While interest rates are very fluid we do not see huge movements on a daily or weekly basis. If you stay tuned to the ABLEnding website and blog you will be able to stay abreast of the situation and will know when mortgage rates are likely going to move up.
Take the time to research your current financial situation. If you have a debt to income ratio that is well below 40% and you have a credit score over 750 you will be able to lock in to some of the lowest mortgage interest rates in the history of the California housing market. Contact us today for more information.