Everyone who owns a home or thinking about buying one, at some stage begins thinking about mortgage rates. After all, the mortgage rate is a key ingredient for many reasons and two of them concern how much the monthly payment will be as well as whether or not the borrower can afford to borrow the amount requested. The higher the rates, the less that can be borrowed. So it makes sense to wonder what rates are going to do in the future.
Who controls VA rates? Interestingly enough, it’s the overall condition of the economy and how consumers impact it. When the economy is really buzzing along, consumers are buying things like cars, computers and a myriad of consumer goods. The Federal Reserve Board, among other things, attempts to control the cost of money for both banks and ultimately consumers.
If the economy is in the doldrums, the Fed attempts to encourage borrowing to stimulate commerce by keeping rates low. Essentially, when times are good, rates are higher than when times are not so good. So what’s the outlook for VA mortgage rates?
If you’re at the very bottom of anything, the only way is up. Ladders, employment and interest rates are in that category. Since VA mortgage rates hit an historic low in January of 2013, then the only way to go is up. And that’s what’s been happening since as mortgage rates have been on a gradual climb. But the key word is “gradual” as the economy has shown evidence of a sustained recovery.
The unemployment rate is down, more jobs have been created and most every economic number available indicates the economy is truly on the mend. The future of VA rates? They’re on the rise and should continue to do so well into 2014, possibly hitting 5.00 percent before the end of next year.