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Is Refinancing Your Pasadena Home in Your Future?
Are you thinking of refinancing your Pasadena home or buying a new one, but think the mortgage rates are still going to move down?
AVOID THIS COSTLY MISTAKE
But is that really what it means? No.
The truth is, the Fed has been buying Mortgage Bonds. BUT… more precisely, they’re buying a lot of FNMA 30-yr 5.0% and 5.5% Bonds. Many of the mortgages in these pools are outstanding home loans with rates between 6.0% and 6.5%, as the rate that a borrower pays is different than the coupon rate given to an investor buying into that mortgage pool, with the difference being taken by Wall Street firms and government agencies. The loans in these pools the Fed is buying hand over fist are likely be refinanced and paid – because current rates make it very attractive to refinance a loan over 6.0% – and thus giving the Fed a quick recoup on some of their investment.
Bottom line: The Fed’s purchase of higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today’s low rates.
The Problem Is…
Here’s the Clincher:
I don’t want anyone to miss an opportunity by either waiting or misunderstanding the media headline. Let’s talk further on this. Call or email me, and let’s discuss what this might mean for you.
Posted by: Irina Netchaev
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