President Trump wants to see pre-recession interest rates which means the Federal Reserve is feeling the pressure to make historic rate cuts. “…get our interest rates down to ZERO, or less…” he said. Wow! Although this pressure has many of us scratching our heads, it does not directly affect mortgage interest. It does, however, influence it. Why? Because it can lead to negative mortgage rates. What does all this mean?
First, in case you’re unfamiliar, negative mortgage rates happen when the lender pays the borrower, not the other way around. It’s rare but has been seen in Europe and at times, can be an indication that a recession is near.
The reality is, however, that there’s a slim chance the Feds will drop rates to zero, let alone negative. And, any forecasted numbers are always subject to could change. The current mortgage interest rates are excellent, and rare, so if you’re in the market for your dream home the time is now to purchase or refinance.
Furthermore, economists believe the U.S. economy is healthy. The last time the economy was this strong, mortgage rates were about 6.5%, so again, the time is now!
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