• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

How to navigate rising mortgage rates

February 26, 2021 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email
why are mortgage rates getting worse?

We’ve been spoiled by ultra-low mortgage rates for the last several months. We saw 30-year mortgage rates go down into the mid two’s on conventional and government loans. These interest rates were brought on by the pandemic, the job market uncertainty, and the broader United States being in a holding pattern about what’s going to happen with the broader economy. Doom and gloom throughout 2020 along with lack of consumer optimism help contribute to ultra-low mortgage rates. Adding in as to who would win the presidency which created further uncertainty in the markets helped drive rates lower. Fast forward to 2021, there is a new administration and ongoing talks about the new stimulus plan. This new stimulus is promoting concerns of inflation within the economy and as a result, both stocks and bonds are feeling the pain of an inflationary environment or rather a potentially inflationary environment. As such, mortgage-backed securities are deteriorating pushing mortgage rates higher. Here is how to handle the present situation with regards to mortgage rates…

We are in an environment right now where there’s still a ton of leg work that has to happen in order for the economy to get back to a positive state. Covid-19 is still a broader concern for the United States, as is the vaccinations, consumer optimism is not at peak levels yet, the job market is stagnating, these things in combination with any further negative economic information that is inevitably going to come out of this environment probably will keep mortgage rates relatively low historically speaking simply put here’s how the math plays out.

Let’s say you where you were looking at a $400,000 mortgage a few weeks ago at 2.75%. Now you’re looking at that $400,000 mortgage at 3.25%. The .5 difference in rate translates to $108 a month of payment, $108 a month of payment can be offset by paying off a credit card for example, or another type of consumer loan. So the name of the game right now if you’re buying a home is to just breathe and relax. Let the loan officer you’re working with qualify you at a higher rate than what the prevailing market rate would be to hedge against mortgage rate movement-plan worst-case hope for the best and come out somewhere in between. Remember interest rates are cyclical in nature, the rise we have in mortgage rates more than likely is going to be temporary and we’re going to be poised for a bounce followed by a subsequent trend back down, as a byproduct of a bleak outlook for the economy.

Just this week the Federal Reserve came out and said they’re going to keep interest rates low for the future which is a signal they’re not optimistic the economy is out of the woods. Remember when there is negative economic information coming out that is typically good news for mortgage rates if it’s not inflationary, right now we have both. Inflation is the arch-enemy of stocks and bonds. If you’re refinancing the opportunities would be to pay off debt, do home improvement, go from 30-year to 15-year terms, drop monthly PMI, and consolidate debt.

The best strategy would be to get your mortgage application in now.  Work with a lender who specifically understands the markets and can articulately explain when the best time to lock or float your interest rate is. You need to be looking for a mortgage professional who has a good price but is also advice-driven and understands the nature of what’s transpiring with the markets and can properly advise you both from an economic standpoint as well as a financial standpoint. Not all loan officers are created the same-think about that next time you’re applying for a mortgage.

Looking to get a new mortgage to buy or refinance? Get started today!

 

 

Related Mortgage Advice from Scott Sheldon

  • FHA Mortgage Rates Vs. Conventional Mortgage Rates

    Searching for a home financing? If yes, consider the most common types of mortgage loans…

  • Mortgage Rates Improve On Jobs Report

    Mortgages rates across the board improved today on the news of the unemployment rate falling…

  • Mortgage Rates Are Higher. Is an adjustable rate mortgage a better fit?

    This depends on a few factors: risk appetite- comfortable are you knowing that interest rates…

  • Beware Of "Advertised" Mortgage Rates

    Newspapers, the Internet, television and media sources are not the best places to research accurate…

Filed Under: Uncategorized Tagged With: 2021 refinancing my home, BAD CREDIT MORTGAGE, buying a home, buying your first home, cash out refinance, mortgage, rates, rising interest rates for loans, sonoma county

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window