lock-in rate « Kentucky First Time Home Buyer Mortgage Loan

Better lock in a mortgage rate now Kentucky – USA Today

July 30, 2011 Louisville Kentucky Mortgage Leave a comment

Better lock in a mortgage rate now Kentucky - USA Today.

Better lock in a mortgage rate now Kentucky

by Sandra Block on Jul. 29, 2011, under USA Today News

If you’re considering buying a home or planning to refinance, here’s some advice: lock in a Kentucky mortgage rate. Now.

Kentucky Mortgage rates, which have been at historic lows for months, could shoot higher if lawmakers fail to reach an agreement to raise the debt ceiling by Tuesday, says Greg McBride, senior financial analyst for Bankrate.com.

A government default would cause Treasury bond prices to plummet, and yields would rise. “Uncle Sam’s borrowing rate is the baseline from which all consumer and business borrowing rates are determined,” McBride says. “If Uncle Sam’s costs go up, borrowing costs go up for everybody.”

Even if the default is short-lived, the ratings agencies have signaled they’ll downgrade U.S. debt. That would also drive up consumer rates, because the government would be forced to pay higher rates to bond investors.

“Consumers might look back on this period six months from now and regret it if they don’t take action,” says Mona Marimow, senior vice president for LendingTree, a loan comparison website.

So far, the debt-ceiling fracas hasn’t affected mortgage rates. The average rate for a 30-year fixed-rate mortgage in Kentucky for the week ended July 28 was 4.55%, only slightly higher than a week earlier, according to Freddie Mac. Rates slipped on Friday after the Commerce Department reported that the economy grew at a lower-than-expected 1.3% in the second quarter.

Borrowers who want to lock in low rates will need to act fast, says Keith Gumbinger, vice president of HSH, a publisher of mortgage data. “If the government does default, it’s going to be hard to lock in an interest rate,” he says.