Below is information regarding the 4% mortgage interest rate from Stephanie Hanna at Platinum 1st Mortgage. She discusses her take on whether mortgage interest rates will ever get this low.

Lately I’ve been getting numerous calls from Realtors and buyers asking me what I know about the 4% mortgage rates they’re hearing about on TV. I thought I’d take a quick minute to relay the information I know, and give you my own personal take.

The source of all this information is an “anonymous authority.” By this source’s own admission, they have not been authorized to make any such statements. It appears the media is more than willing to sacrifice their own credibility in an attempt to make headlines.

The plan, if there is indeed one, is purportedly being supported by a few Republican members of Congress; Republicans who happen to be the minority part in both the House and the Senate. Many believe that the chance something as politically meaningful as a government sponsored mortgage incentive can successfully make it through a partisan Congress is extremely small.

Keep in mind, what this plan suggests is that Congress can dictate interest rate levels in a free and open marketplace.

If interest rates were to drop to 4%, the mortgage market would suffer incredible bottlenecks. As it stands, while interest rates are a full percent higher than this plan suggests, many lenders cannot keep up with the volume. I’m told my own competitors are currently telling clients it will take 120 days to complete refinances. It’s not that we as loan officers can’t get applications in at current rates, but we’re somewhat limited by the consolidations we’ve seen over the past two years. There is a point when one more loan coming into a strained system no longer equates to a positive financial gain. Economics 101 teaches us that when demand exceeds supply, prices, or rates in this case, rise.

The frustration with these anonymous rumors, are that we’re seeing many buyers choose to sit on the sidelines while they wait to see if interest rates do in fact reach 4%. While I won’t say we’ll never see those kinds of rates, I will say that if we don’t see them, many buyers will have missed out on the incredibly low rates we currently have. Over the course of the last 3 weeks I’ve seen my own rates rise well over a quarter point.

So the bottom line here is that yes, there are rumors that mortgage rates will hit 4%. Key word here: rumors.

Filed under: LOAN INFORMATION