Originally Posted by samclem
I sure don't know, but:
1) I can't believe they'll go down from my present 5% mortgage. That's the lowest they've been in decades.
2) They got that low because a bunch of cash was pumped into the MBS market. Folks are a lot less willing to put their money into these now.
3) Unless the government pumps a bunch of bailout money into the system (making it available use for commercial paper loans), businesses will need to find a place to get their money. That source could very well be--banks. If banks have greater demand for their pool of available lending cash, I'd guess they'll charge more for it. And, if they can charge more for it--maybe they'd be willing to sweeten the deal for me to give them a wad of cash and pay off my low-rate mortgage.
But, these are the speculations of a rank amateur.
thanks for the response. I think
rates will go up, but I won't make it a premise of my investment strategy. But the other thing that could happen is this....
Let's say the American people realize "en mass" that they have been borrowing and spending too much. Maybe many of us buy smaller homes, less expensive cars, and start increasing savings. If that happens, the banks will need to incentivize people to borrow...and would do so by lowering
Could happen...who knows.