“Mortgage rates are set to increase” said the experts as they gazed into the crystal balls about a year ago. We confess, we too thought we may see somewhat of a dramatic increase. We, and they, were wrong.
The CEO of the American College of Financial Services opined mortgage rates were likely to increase a “notch or two”. Exactly what a “notch” is was unexplained. I would assume it would mean a full percentage point. That hasn’t happened. Others were more subdued in their estimates and were closer to being correct.
No one, and we mean NO ONE can accurately predict where rates are headed. We all use our best guesstimates or, as those in the know prefer to say, our educated guess to place rates either up or down. We encourage veterans to consult with financial advisors or tax experts and make decisions on what works best for you. The mortgage rate, while important to some degree, should not be the only determining factor when considering a home loan.
We have, on several occasions, talked about the benefits of using your earned VA loan to buy or refinance a home. Not only are rates sometimes lower on VA loans but you can buy a home with zero dollars down. The VA will guarantee the full purchase price of your home. Lenders like that guarantee because it reduces the risk to the lender without pushing up the rates available to you. Another very positive aspect of using your VA mortgage is it is an assumable loan. If you decide to sell your home another qualified veteran can assume the balance of your loan. We’ve detailed that in earlier posts and won’t repeat the significance of that benefit here but if you want details call Brad at VALoansMN 612-240-9922.
So how wrong were the experts who made predictions of rising rates? A year ago the average mortgage rate was about 4.25%. Today that rate is just under 4.5%. Given recent comments by the Federal Reserve’s Open Market Committee they do not expect interest rates to make any dramatic moves upward in coming months.
Come back in a year and we’ll tell you how right (or wrong) we’ve been. Remember, no one can predict where rates are going!
VALoansMN blog is dedicated to providing details about the benefits of using a VA loan to buy or refinance a home. But this time we’ll take leave of that mission to pay tribute to those who have or are serving. We strive each day to honor those who chose (or did not choose but were drafted) to serve in the U.S. Armed Forces. This time of year, the entire nation is asked to join in that tribute. November 11th is Veterans Day. Older adults may remember it as Armistice Day.
Veterans Day was born in 1919 to commemorate the end of World War I known in that day as the Great War. It was the end of the war between the Allies and Germany. President Woodrow Wilson made the proclamation:
“To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in the country’s service and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of the nations.”
Many have served in other wars since that day. We at VALoansMN are honored to meet these service men and women every day. We are here to serve you and we never forget our mission which is to serve those who have served or are serving us. There are almost 19-million Veterans in the U.S. today. Minnesota, the Dakotas and Iowa are those we are able to serve. Thank you for giving VALoansMN your trust, for giving us the opportunity to, in some small way, serve you. We never forget what you have done for us and for that, we are most grateful.