Mortgage rates did indeed go down after the Coronavirus spread and financial markets started to panic. But the Coronavirus and mortgage rates aren’t directly connected.
People considering a refinance continue to contact me for low rates, but now that rates have spiked it may no longer makes sense.
The recent mortgage rate reductions we saw may be gone for a period of time, but the rate changes are not as drastic as the media made it sound. Nor, are the mortgage rates what the Federal Reserve Bank Overnight Lending Rate is. You may think that mortgage rates dropped down because the Federal Reserve cut rates, but what actually dropped significantly was the rate that the Federal Reserve charges financial institutions for borrowed funds on a daily basis. The Treasury bond rates also dropped, but not as significantly. These are still not mortgage loan rates and not an exact correlation.
It’s true that mortgage rates had fallen earlier this year and it may have made sense to start a refinance at the time. There are many people who started that process and will be closing on their refinance in the next few months. But if you did not lock-in during past weeks, it may be too late to lock-in a historically low rate.
Mortgage rates may go down again, but don’t expect it right away.
You can always fill out this form below to see if you should refinance now: