It appears borrowers don’t believe the hype: Despite the debt-ceiling drama and dire pundit predictions of national default and skyrocketing interest rates, the Mortgage Bankers Association reported Wednesday that mortgage applications decreased a seasonally adjusted 5 percent last week compared to the week before, with the refinance portion of those applications declining from 70.1 percent to 69.6 percent.
Bryan Smith of Quality Financial Solutions in Commack says the local refinance scene is similarly stale. He says he expects that the debt ceiling will be raised and the crisis will be averted. But if the talks were to fail and the United States were to default on its debts, Smith says we could expect bond yields to rise -- and interest rates to follow. Even in that case, he says the rates “shouldn’t skyrocket overnight, but can go up continually.”
Still, if you were planning to get a mortgage in the near future, it’s not a bad idea to lock in a rate while they’re still low since the debt ceiling issue is unprecedented and unpredictable
For now, there’s nothing dramatic happening with interest rates: The average rate for a 30-year fixed-rate mortgage crept upward, from 4.52 percent last week to 4.55 percent with an average 0.8 point today, while the 15-year rate showed no change at all, remaining at 3.66 percent with an average 0.7 point, Freddie Mac reported today.