Market Update for April 15 2013: Most Americans Still Paying too Much Interest

By chrisking • April 19th, 2013

In January, I hypothesized that 2013 would be a tumultuous year for interest rates. So far, through the first quarter of 2013, my assessment has been correct. After the Presidential election and into January of this year, rates ticked up. There was a sense of direction with the election having passed. Economic news was positive. And employment numbers were improving. Lately, we’ve seen renewed struggles in European economies (for those that read my articles, you know that I think this will continue: even localities in the United States face unresolved budget challenges). North Korea’s posturing causes investors to seek the safety of bonds, causing rates to go down. The net effect for my clients in the last few weeks has been that we’ve locked interest rates at fantastic levels on nearly all of the loans that I’m working on. In point of fact, one client applied in December of 2012. By the time her loan was approved, rates had gone up. I encouraged her to make a few more mortgage payments and wait for rates to hit the desired level. Just this week, they did. We locked her rate and can now attain her goal of reducing her rate and payment. It took patience on her part: but she was wise and will reap the benefits as a result.

A Los Angeles Times article from September of 2012 makes the point that “roughly 69% of American homeowners with mortgages at the end of the second quarter had rates of 5% or higher and about 33% of them had rates above 6%” (“Two-thirds of American with Mortgages Pay 5% Interest or Higher;” Lazo, Alejandro; Los Angeles Times; September 18, 2012). To me, this means tremendous opportunity for clients to put themselves in a better financial position. It means tremendous potential for our economy if our legislators can continue to push for more refinance opportunities including and beyond the Fannie Mae and Freddie Mac programs. And it means that we need to keep getting the word out to our friends and clients that even though obtaining a mortgage in today’s environment takes some work, the thousands of dollars of savings can be well worth it. CPK Mortgage will continue to assist our clients in improving their financial positions by taking advantage of this fantastic interest rate environment.


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