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Mortgage rates for the first two months of 2008 have hit their lowest point in over three years and their highest point in over a year. March will be one of those months where rates can go either way at a moments notice.
The month already started with a restriction being lifted off of Fannie Mae and Freddie Mac which will allow the government backed mortgage companies to purchase more loans to bundle and sell on the secondary market. This will allow for mortgage lenders to write more mortgage loans that are virtually guaranteed to be purchased by the two mortgage giants.
The Feds also meet later in the month and are almost certain to announce another rate cut. The rate cut directly effects the interest rate at which banks borrow to one another. With Fannie and Freddie being able to purchase the loans after they have been written may entice mortgage lenders to lower the interest rates that they offer to help consumers qualify for a new mortgage and to help stimulate the economy.
The U.S. economy is also faced with rising oil and food prices, a weakened job market and a new concern of homeowners who can afford their homes but instead are simply walking away from them. If mortgage lenders see a steep increase in defaults and delinquencies throughout the month they may decide to raise interest rates to make up for losses.
If you are in the market to refinance or purchase a home, getting a mortgage quote to see how much you can afford may be a wise decision. March is going to be a month of steady or slightly lower interest rates or a month where interest rates may be the highest in recent memory.