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Mortgage Insurance Quote In Alberta: The News in the Interest Rate World

Todays Date: December 15, 2018

The real estae world has been sent completely on its ear this year, with bailouts, credit problems, foreclosures and more. What will happen? It is important to make an intelligent guess about how interest rates will go.

Tight conditions in the lending world should normally mean lower rates, since lenders would have to lower rates in order to attract customers with good credit ratings. But it appears that banks are actually raising rates, in the hope that will improve their revenue.

It seems almost short sighted, but to make up for plunging revenues, banks are increasing rates across the board, instead of giving attractive rates for their most credit worthy borrowers. Matters in the financial industry are far from normal, however, and credit card companies are also using this strategy of higher rates to boost revenue in this tight market.

It used to be that when the economy slowed down, banks would lower their interest rates and this would give an incentive to borrowers. Things are not like they were before, however, and new rules seem to be the rule.

How should a homeowner view this crisis, and what steps should he take? Is it better right now to wait out this unusual phase, in the hopes rates will fall back down, or take advantage of whatever credit is there before the economy gets worse?

Not only is there a current, there are many who even believe there is a depression coming, which will surely lead to deflation. Deflation would mean even lower interest rates so anyone who is considering a purchase or refinancing at this stage would probably be better off to wait for conditions to improve in the world of interest rates.

Some lenders are still actively seeking borrowers. There are quite a few small banks that never got caught up in the credit crunch like the larger banks. In this case, being small was an advantage, since many of them were insulated from the issues now haunting most of the credit industry.

A second good argument for waiting is that home prices continue to fall, with predictions of futher price cuts of as much as 35%, even after the 20 to 25% decreases already seen. Case-Schiller, a research organization that leads such studies, reports that in some regions prices have plummeted 25%, with national averages at 17%. If a combination of lower interest rates and lower home prices are in store for the future, it may be wise to delay a home buying decision.

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