Mortgage Rates Are Rising - What's Happening?

Mortgage interest rates have been heading up for most of 2013, and many mortgage rate watchers recently were surprised by an unusually sharp spike at midyear.

But why? For home buyers and homeowners considering refinancing, the upward rate trend is troubling, to say the least. Buyers get less home for their money. Homeowners looking to refinance are finally seeing a boost in equity, but higher rates make refinancing less attractive.

For a few weeks, rates trended down as many potential borrowers watched from the sidelines. Now as rates swing back up, those on the sidelines are wondering whether to jump in now or wait-and-see.

Rates are on the rise for several reasons:

- Typically, global and national uncertainty pushes rates lower. The historically low levels reached at the end of 2012 occurred as the economy slowed and budget battles threatened to shut down the U.S. government.

- Some indicators are pointing toward a recovery in the broader economy, after some slowing in late 2012.

- The Federal Reserve Board is voicing its intent to cut purchases of Mortgage Backed Securities and an end date for the stimulus activity known as Quantitative Easing (QE).

The million dollar question is, where are rates headed next? Will they continue to swing up and down, or is this the beginning of an extended upward climb?

No one can say with certainty where rates are headed tomorrow, let alone for the rest of 2013. What we can see is what we already knew - that record low rates would end at some point, perhaps with little warning.

Many veteran lenders say, don't focus on where rates were, but on where rates are - still historically low. If you have the means to refinance and your rate is above 4.5%, be sure to call us. Whether you are thinking of getting a purchase or refi loan, it may be time to talk to an experienced mortgage lender to see if this is the time to get it done.

If you feel so inclined to contact someone who truly knows the industry, Western Bancorp's knowledgeable and experienced team has closed more than 500,000 loans since 1986. We offer a large selection of loan products at competitive rates that you may not be able to find with a broker or other banks.

As a mortgage bank that only lends in California, we understand the needs of local borrowers. We don't deliver an old-school, high-pressure sales pitch. We operate as a resource to answer your questions and help you find the very best mortgage financing for your family.

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