Brexit happened and mortgage Bonds, thus mortgage rates, reacted delivering a great opportunity to homeowners and homebuyers. But what the heck is Brexit and what does it have to do with mortgage rates?
What is Brexit?
Brexit is a term coined from the withdrawal of Britain from the European Union – the British Exit. The people voted last night and the expectation was Britain would remain in the EU. Surprise, surprise…instead, the British walked out, withdrew from the union and the Prime Minister resigned.
What does Brexit have to do with Mortgage Rates?
Financial markets around the global had been expecting the Brits to remain in the union. Today, financial markets are roiled in response to the unexpected decision. Global markets are tanking. Our stock market plunged 500 points early this morning and ended the day down 611 points.
The capital markets – both stocks and bonds – hate uncertainty. As usual in uncertain times, people seek safety. As a result, money flows into the SAFE HAVEN of Treasuries, gold,and bonds, including mortgage bonds. This is what is happening today! Mortgage rates are tied to mortgage bonds, so when bonds improve, so do mortgage rates.
There is an expression that begins, ‘be greedy when others are fearful”…meaning, today could represent a historic time to lock an interest rate on what is clearly a “fearful” day for investors. Be greedy – take advantage of this golden opportunity.
There are many things to be uncertain of…this is not one of them. Rates are incredibly low and we are in a window of the best time you may ever see again to finance or refinance.
If you’ve been sitting the fence, especially regarding a refinance, it’s a good time to make your move. Contact a mortgage planner and get a Total Cost Analysis to see if it makes sense for you to refinance.
Here’s the thing…this could disappear in a blink. Don’t wait! See if you can benefit…now.