The 2016 presidential election was, if nothing else, an interesting one. The pending office of president-elect Donald Trump is sure to bring with it change on many levels. But how will a Trump presidency affect American homeowners’ ability to refinance?
Mortgage Rates: An “Alley-oop” Courtesy of president-elect Trump?
Market analysts are predicting mortgage rates will increase in 2017 under the new POTUS, thanks to the market changing from a bond-fueled one to a stock-fueled one. While mortgage rate increases are inevitable (and a stagnant market is never a good thing), some experts say we’re on the heels of increases that could make refinancing in 2017 all but a pipe dream for American homeowners.
Federal interest rate increases are good for many things: growing 401(k) accounts and getting better returns on savings and money market accounts, to name a couple of those things. However, when it comes to homeownership, higher federal interest rates also mean increasing mortgage rates. Since rates have been so low in recent years, this anticipated increase could mean that, for many homeowners, the best time to refinance could be upon us.
According to CNBC, a 30-year fixed rate mortgage hit 4% this week–the highest rate seen since the first week of 2016. The report says that homeowners were in a rush to rate lock loans due to the pending increases, but were also toiling with the decision of whether or not to wait out the market in hopes rates would decrease again.
Home Values on the Decline
Historically low mortgage rates have driven home values up in most American markets, but the threat of burgeoning rates brings with it the risk of falling property values for the first time in recent years. This seesaw effect makes for an even more pronounced dash for damage control for American homeowners.
Not only do declining home values convert a seller’s market into a buyer’s market, but they also mean that many homeowners could miss out on increased equity due to current property values.
What It Means for You: The Time to Refinance is Now
Many American homeowners have been waiting to see if mortgage rates would dip even lower before refinancing. Before the election, there was no indication of an immediate threat to rates. However, since president-elect Trump won the Whitehouse, the financial atmosphere of the U.S. housing market appears to have turned volatile. The future of mortgage interest rates is brittle at best, and the possibility that rates under 4% could soon be a thing of the past.
Few remember the mortgage interest rates of the 80s, which topped 20%. While there is no indication that we’re headed in that direction anytime soon, those of us who lived through those painfully high rates certainly remember them in a not-so-fond way.
For many American homeowners, the time to refinance is right now. The days of waiting it out for lower rates may be gone by the wayside, but rates are still low today. Many homeowners just don’t want to risk the higher rates and lower property values that 2017 could prove to bring with it.
Peace of Mind with a 5 Year Rate Guarantee
Peace of mind is priceless, so knowing that you’re getting a great rate now is just as important as knowing you’re protected tomorrow–and for the 1,825 tomorrows after that. With NLC Loans’ 5 Year Rate Guarantee, you’ll not only get to take advantage of today’s low rates right now, but in the unlikely event that financial analysts are wrong and rates actually decrease at any time in the next five years, our clients will be able to refinance into that lower rate without paying origination or appraisal fees.
One thing is for certain: our great country is in for big changes under Trump’s pending presidency. Refinancing now may be the best decision for many homeowners who are looking to lower their monthly payments, pay off high interest credit card debt, and save for college, retirement, or home improvements. For more information on refinancing and for a free, no-strings-attached refinance rate quote, contact an NLC Loans Personal Mortgage Advisor today at 877-480-8050.