Big Ben and Whitehall from Trafalgar Square, London

Last week, the United Kingdom voted to leave its place in the European Union. Because of Thursday’s Brexit vote, we anticipated mortgage rates could drop to historic lows. Today we can confirm mortgage rates dropped about one-eighth of a point after the financial commotion overseas. With interest rates already at three-year lows, this affords to you a great opportunity to refinance or purchase a home.

Brexit has created aftershocks to the global economy, many of which we have witnessed over the weekend and will likely continue to see. The stock market took a major hit, the pound depreciated in value and investors are moving their money to alternative opportunities.

Why This Vote Made Mortgage Interest Rates Go Down

Why would a vote across the Atlantic impact you or anyone else in the U.S?

Well, we are part of the global economy. This means shocks in other areas of the world can affect us – and they do – a lot more than they did 30 years ago. A vote in the UK – a big one like leaving the European Union – has created uncertainty among investors, as they don’t know what the coming weeks and months will look like. Because of this uncertainty, investors want to find more stable, safer investment opportunities. Instead of keeping their money in the stock market (which went down a lot on Friday), they might put their money in government bonds or mortgage-backed securities (MBS), among other options.

One relatively safe investment is an MBS, which are oftentimes fully backed or sponsored by the government. Because of this, they offer  lower interest rates for investors, but are more predictable and less risky than the stock market. Investors put their money in MBS’s, which are then lent to mortgage companies who lend it to you, so you can purchase or refinance your home. Because all of these investors are putting their money into MBS’s, there is a greater supply of money to lend to you. Thanks to the theory of supply and demand, as the supply of money goes up, interest rates go down. This is a beautiful thing, because you get a lower interest rate on your mortgage.

Opportunity and Urgency

The easiest way to take advantage of this opportunity is to use Rocket Mortgage by Quicken Loans. Rocket Mortgage is completely online and gives you an intelligent, customizable mortgage solution based on today’s rates.

 

This is a great opportunity for those in the market for a mortgage. Because of lower interest rates, you can potentially save thousands of dollars over the life of your loan. We cannot predict how long these low rates will last, so consider locking in your mortgage rate today while they are still at near record lows.

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This Post Has 18 Comments

    1. Hi Sue:

      We try to be as efficient as possible, but that really depends on the loan. If you need an appraisal, it’s probably going to take a bit longer right now just because it’s the busy season for appraisals. Not all loans require an appraisal. It also depends on the kind of documentation we need and how long it takes to get it. That said, the key to any smooth process is communication and we pride ourselves on keeping you informed at all times to make sure the train is running as well as it can and help you accomplish your goals. Let us know if you have any other questions.

      Thanks,
      Kevin Graham

  1. We refinanced last October with Quicken and now I am being solicited to refinance at a lower rate by other comapnies due to the Brexit drop. They are saying no $ down, no credit check etc. Rate is already 3.75% – can I get much lower and same options with Quicken?

    1. Hi Kat:

      The one thing I will caution you on when looking at mortgage rates that we or any other mortgage lender advertise is to make sure you’re looking at the APR. That’s the actual all-in rate that includes the closing costs and everything. Make sure you’re not being given just the base interest rate because it doesn’t factor in everything. Since you are doing a refinance, it’s possible to have no money down if you’re just doing a rate/term refinance, but I would be skeptical when they tell you no credit check. All lenders have to assess risk somehow and that’s how they do it. If you check out Rocket Mortgage, we can take you through your loan options and, if you decide to move forward, get you approved right online. It’s impossible for me to say in the comments what your rate would be because every situation is different, but I think you’ll find our rates are competitive.

  2. Getting a 30 yr mortgage rate with a 3 in front of it will be something that we talk about for decades. Much like the high teen % rates we experienced during the early 80’s.

  3. If your credit score is low is the interest rates high and is there a possible of even getting a refinance? Is the closing cost high?

    Thank you,
    Patsy

    1. Hi Patsy:

      It’s very difficult to say what your rate would be because it’s dependent on a number of factors including your credit, but also a lot of other things. The same can be said for closing cost. Every situation is different. I’m going to have someone reach out.

      Thanks,
      Kevin Graham

    1. Hi JoAnn:

      Whether you can do this and whether it makes sense for you depends on a variety of factors including the type of loan you have. I’m going to have someone reach out.

      Kevin

  4. I have a current mortgage rate of 5% and I’m considering refinancing at 3.75%. Is this a good rate or should I wait to see if the rates go lower?

    1. Hi Lisa:

      I can tell you that rates could go down. They could also go up. No one really knows what’s going to happen from one hour to the next at this point. My advice would be to lock in a good way when you see one at this point. You can get started by checking out Rocket Mortgage and getting your approval online. Hope this helps!

      Thanks,
      Kevin Graham

  5. My husband and i are working on getting our credit up, how high of a score do we need thru you to get a loan

    1. Hi Patricia:

      We do FHA loans as low as 580 and conventional and VA loans at 620. Hope this helps!

      Thanks,
      Kevin Graham

        1. Hi Gerald:

          Every situation is different, but we can help you look into whether this makes sense with closing costs. Thanks for reaching out!

          Thanks,
          Kevin Graham

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