If you have ever paid attention to the Indianapolis mortgage rates, you’ve probably noticed that they change a lot. Every day the interest rates have the possibility of going up or down. But what makes the interest rates increase and decrease?
If you just know what the rates are for today, you are really only getting half of the story. The other part of the information that you need to know is the reasons that cause the mortgage rates to be whatever they are for today. You can learn more about Indianapolis mortgage rates by reading this post.
There are lots of different reasons that can make your rates increase or decrease, and knowing what they are makes you be able to predict to some degree what the market conditions may likely do in the future.
Why Indianapolis Mortgage Rates Move
For instance, if you know that the current rates are in the middle of an extremely high period, you may want to wait until they go back down. Or conversely, if you are able to determine that the market conditions are extremely great for mortgage rates right now, you may want to look into refinancing or getting a new home loan to take advantage of how great the interest rates are at the moment.
And being able to predict this months or years in advance - even weeks in advance - would be extremely advantageous for you. That is, if you’re interested in saving money and being able to turn a profit from your home when you sell it. Which I think we are all pretty much interested in saving thousands of dollars, or making thousands of dollars on the return sale of your property.
The main goal in looking for a mortgage is to get the lowest rate you can, and the best term on your new loan. It may seem like .12 percent isn’t really a big deal, but when you stretch it out over 15 or 30 years, that .12 percent can be equivalent to thousands, tens of thousands, even hundreds of thousands of dollars in the long run. So make sure you pay attention!
One way you can look at the rates and predict what they may do is to look at the Bond Yield. If the Bond Yield goes up, usually mortgage rates will also go up. And if Bond Yield goes down, you will likely see mortgage interest rates go down also.
You can look at the 10-year bond yield and see what it is doing. Keep your eye on it and watch its changes every day, every week, every month. And if you can slowly see a change, either upwards or downwards, in the bond yields, then you can also assume that mortgage rates will soon be taking a similar path. The rates go with the bond yield, not against it. That’s an easy way to remember what to look out for.
Another thing that has an influence on rates is what the current economic situation is like around the world. Look at things like different kinds of bonds, the current GDP, number of homes being sold, stocks, and other things in the economy. If things are going good in the economy, then chances are that rates will be higher than times when the economy is doing really poorly. So bad economy equals good mortgage rates. And vice versa. Another thing to look at is the current unemployment rate. High unemployment rates means low mortgage rates.
Other Things to Consider
There are many, many other things to consider as well. Things like the FED, your current financial situation, time of the year, and numerous things can drive rates either up or down for you. Make sure to talk with a local mortgage expert to help you get a good idea of what you should do.