The Federal Reserve has just concluded its final meeting for the 2011 calendar year stating that they plan to keep Fed rates low through mid-2013. This will have a positive effect on mortgage rates in 2012 helping to keep home loan rates low. Mortgage rates have been maintaining near record lows for several months as the European Economy continues to falter through its own debt crisis.

The United States has experienced moderate growth through the end of 2011, which is an improvement from last quarter, according to the Fed’s announcement. With that said, unemployment is maintaining high levels and the foreclosure rate has not seen much in improvements throughout 2011.

CNBC’s Hampton Pearson was live at the Office of the Treasury reporting that the Fed pledges to keep rates exceptionally low through at least to the middle of 2013. A panel of experts discuss the Federal Reserve Chairman Ben Bernanke’s decision and how it will impact the economy, with Gina Sanchez, Roubini Global Economics; Bill Gross, Pimco; Josh Brown, Fusion Analytics; and Stephen Gallo, Schneider Foreign Exchange.

Entering into 2012 we expect the first half of the year to maintain historically low mortgage rates while the second half of 2012 will show increases. As always, the mortgage backed security market will display a rollercoaster like trend peaking at low points and high points as it gradually raises in 2012.

My recommendation for fixed mortgages would be to lock in your mortgage rate on a 30 year fixed rate as soon as you are able to and begin benefiting from low mortgage rates. We can make predictions as to where rates will be however the fact is that no one will know for sure where the rates will be in the future. Our recommendations to lock your rate in is the safe route as I believe there is more to lose than to gain by waiting. For example, a .125% rate drop may reduce your monthly payment a few dollars per month whereas if rates go back up to historical averages, the rates will be changing from around 4.00% on a 30 year fixed rate to around 7.00% raising monthly payments by hundreds of dollars.

If your mortgage rate is over 5.5% on a 30 year fixed rate or if you are in an Adjustable Rate Mortgage, start the process or locking in your mortgage rate in the 4’s by apply for a mortgage refinance early in 2012. If you believe you are underwater in the value of your home, you may be able to take advantage of President Obama’s Home Affordable Refinance or an FHA Streamline Refinance if you have an FHA loan. There are several options available to reduce your payments but you may be out of luck if you wait too long in 2012.

Should I refinance my mortgage?

If you think now might be the right time for you to refinance while mortgage rates are low in 2012, request a free quote from a licensed loan officer and get a professional opinion on your situation.

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    For more information visit the CNBC.com Article

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