Interest rates will fluctuate enormously over the next few weeks.  Due to the volatility in the global markets and the political environment circling the banking industries, banks do not know which way to turn.  They do not know if they will have money to lend out next week, or for that matter will they even be around at all!

 

Last week, the media was reporting how low the rates were going.  Well that only lasted about a day. Rates did dip below 6% and I wrote about it along with everyone else.  Ironically, we were doing a 1,000 piece client mailing that day and I was gleeful of the timing.  The next day rates had gone up and began to swing wildly.

 

Today, I locked in an interest rate at 6.25%.  I thought it was high for a normal purchase mortgage, but apparently not.  A few lenders, such as HSBC, have increased rates so high in order to price themselves out of the market.  When a bank’s rates are much higher than the street, it means they do not want to take in any new loans for a while.

 

Where will rates be in the next few weeks? All over the board!  I would say they will swing from 5.75% to 6.75%.  There are many factors that will blow them in the wind.  Politics will be the biggest factor on rate changes.  So watch and don’t jump unless you have to.

Dale Siegel