Bernanke makes bold move to ensure low interest rates
Homeowners should definitely stop and take notice—on September 13, 2012 the Federal Reserve announced that that the central bank will embark on a third round of quantitative easing (QE3) and purchase $40 billion in mortgage backed securities each month in an effort to spur more refinancing and home purchase activity. Lower interest rates could be right around the corner.
The Fed’s aggressive move is unmistakably intended to stimulate the nation’s employment and housing markets. The Fed’s QE3 is also more ambitious than its predecessors–the Fed indicated that the $40 billion will only be applied towards the purchase of mortgage backed-securities and that the policy will remain in effect indefinitely. Moreover, the Federal Open Market Committee (FOMC) reported that it will keep the federal funds rate in the 0% - .25% range until mid-2015. This is great news for homeowners.
The announcement of QE3 immediately triggered a rally in the financial markets which reversed the upward trend in interest rates that had been occurring in the weeks leading up to the announcement. Homeowners across the country should be checking their mortgage interest rates against today’s record low interest rates.
There is a cautionary note, however. The Fed clearly signaled that QE3 will remain in effect only until the nation’s job market improves. Given that the nation’s unemployment rate declined to 8.0% in August, and that corporate earnings and the stock market are showing definite signs of strength, QE3 may not be a long-term policy move by the Fed. Homeowners would be wise to act now, if they haven’t done so already.
For the first time in over 60 years, homeowners can take advantage of 30-year mortgage rates that are in the mid-3.00% range, or 15-year rates that are below 3.00%. These record low interest rates mean that almost every homeowner in America can benefit from the Fed’s latest move, particularly the large number of homeowners with FHA and VA loans who are eligible for the FHA/VA Streamline Refinance Program. This unique program is the easiest way to efficiently reduce the interest rate on your home loan.
To learn how the Fed’s latest move could benefit you and your family, we encourage you to contact James B. Nutter & Company today.