Whether you’re planning to buy a new home or thinking of refinancing your existing home loan, it’s a must for you to check current mortgage rates in Utah. Take note that even a 1% difference between mortgage rates can result in a 10% difference in your monthly payments. If you’re waiting for the best rates to come along, it’ll help to know a few of the factors that affect their rise and fall.
State of the Economy
A stable and growing economy equates to more jobs, higher incomes, and more investments. This means that prospective homeowners will finally have the funds to purchase their dream house, and the high demand for mortgage funds can push the rates upward. On the other hand, a slow economy can result in lower rates due to the low demand for mortgage borrowing.
The law of supply and demand likewise plays an important role in the housing market. For instance, mortgage rates can be reduced to attract more buyers when the housing supply in your area increases due to foreclosed homes being put up for sale. So, you may want to consider buying or refinancing once you start seeing several of those “for sale” or “foreclosed” signs.
If the Federal Reserve increases the supply of money, interest rates will decrease. Similarly, monetary policies rolled out by the Fed to stimulate the economy can bring down long-term mortgage rates. As such, you may want to wait for financially-related government projects or programs when looking for low rates.
Economic instability in other countries can make investors nervous. When investors feel threatened, they tend to invest in assets which they consider “safe.” Fortunately, U.S. mortgage-backed securities are considered safer assets compared to those in nations that are more unstable. More money invested in mortgaged-back securities leads to lower rates.
Apart from the factors stated above, mortgage rates may also be affected by your financial status, loan type, location, and so on. It’s a good idea to consult an established mortgage company like the Altius Mortgage Group if you want to learn more about what rates you qualify for when buying an attractive Utah home loan package for the first time or refinancing one. Just remember that when it comes to getting the best mortgage rates, sometimes timing is everything.