What is the theoretical floor for mortgage rates? How low can they "possibly" be?

While you were asking this, rates shot back up today. What difference does it make how low they can be, you should ask yourself; "how low is enough to make a difference for me?" You can never time the market, you will always lose.

NOW! NOW! NOW! Rates are on the way back up so please lock in before it is too late. :) Freedom Mortgage is a direct lender and we fund loans in all 50 states. I would be happy to provide you with a free quote. adennie@fmbranch.com. Thanks.

Theoritically, rates can't get much lower than where they are at. Here's why: Mortgage interest rates are set by the demand for mortgage bonds. These bonds are traded on wall street just like stocks. When demand is higher, rates go down. There is a "floor" because there is no mortgage bond below about 3.5%. Investors want a return on their investment so when buying the 3.5% coupon (or bond), interest rates are going to be in the high 3's or low 4's. This is where we are at. For rates to go much lower, a new coupon (or bond) would have to be created. So rates are probably at, or near, bottoms right now.

Jody,You stated you wonder when to refi. The question may be, I wonder if I can refi? Surely, it's not new news to you that property values have fallen substantially. Every foreclosure and short sale in your area will affect your property's value as well. The lower your loan-to-value the better rate you will receive. Waiting for whatever the bottom is, or was, is a big chance in todays market of continuing devaluation. Something for you to consider. .... Happy funding, Rudi

Jody,What terms do you have now..? Email some details and I can give you an idea of how much you can save and strategies to use to "ride the rates down" should they continue to decline.Best,MattMatt@pierwestcapital.comPier West Capital