Will Lower Mortgage Interest Rates Help Anyone?

The Treasury Department is poised to try to lower mortgage rates to new lows, and on the surface, this appears to be a good omen for both this industry and the overall economy as well.  But does it leave existing homeowners out in the cold?  We’ve already witnessed the lowest mortgage rates in decades, and even though applications for refinancing existing mortgages are up, the question still remains as to the long-term positive effects.  Significant numbers of homeowners might not have the money to begin the refinancing process if they’ve already done so recently.  As for buying another home, there’s always that pesky task of selling the existing one first.  It contributes its own share of complications to an already difficult process.

Add to this the climate of uncertainty in the employment market.  Many workers are in fear over their jobs, and that doesn’t bode well for taking on new debt of any kind.  Not only that, the creditworthiness of many consumers is in the doldrums.  That means that the amount of benefit from a drop in rates might be minor, if there’s any at all.

Any move to lower interest rates is a good thing.  But the intended result is to open up credit products to those who were previously unable to take advantage of them due to their financial status.  With the current economic woes, those suffering the most in the lower and middle class may not be in a position to benefit.

Tags: mortgage rates

This entry is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.