A lot of people have expressed concern about the effect of S&P’s downgrading the credit rating of the United States would have on mortgage interest rates. You would think a lower rating would mean interest rates would move upwards. Surprise! Rates are already incredibly low (30 year fixed conventional in low 4’s) and rates are moving a little lower again today. The stock market is a little spooked and the Dow Jones average is down. What that means is there is a flight to safety and people are moving funds out of the stock market and into the bond market which are perceived as being safer although bonds have the lower credit rating. I’m sure there will some volatility with interest rates but in the overall scheme of things, it is likely that rates will stay near this favorable range for awhile.
Mortgage Loan Originator
Mahone Mortgage, LLC