Mortgage Rates: Are They Going Up?

By: PamellaNeely
Once you start watching mortgage rate activity, you will quickly find that they tend to fluctuate. You are then left to make the decision about when to lock in a particular rate. Should you wait to see if the rates fall, or should you take advantage of the current rates? It is a tough decision, because once you have locked in a particular rate, you cannot undo that action.

To be good at figuring all of this out, you should educate yourself on the interest rate markets, and learn about their associated risks. Find out what stimulates the interest rates and then monitor those reports carefully.

How do you know what to watch? Mortgage rates are determined by the activity of investors buying and selling loans. Those investors can be guided by the uncertainties and fluctuations of the economy. If investors are uneasy about the market and begin selling home loans, then the mortgage rate will adjust.

Some news reports come out with information that causes people to take action and refinance, or make an offer on a house. These activities affect the interest rates as well. By the time people hear the information and react to it, the interest rate has already risen.

Rather than using the media for interest rate information, it is best that you do your own investigating. Try to hit the keyboard and start researching on the internet. You might also contact a reputable banking professional to confirm your findings.

Watching the unemployment data is also a good indicator of mortgage rate trends. High unemployment and recession cause interest rates to go down. You can keep track of this type of data through a variety of different financial reports that are available to the public.

Rate drops are logical in the bigger picture, bearing in mind that when the public has less money, the interest rates slump to encourage them to borrow money. This does seem a bit odd, though, since many of the people borrowing have a harder time paying back the money. They are a risk for the investors. High risk borrowers force the interest rates to rise.