DETROIT (WWJ) – As the debt ceiling debate continues in Washington, there’s concern it will cost homebuyers more. The chairman of the CMPS Institute in Ann Arbor, Gibron Nicholas, says it’s a credibility crisis for the U.S.
“Our credit rating might go down, which will cost us more money when we borrow money as a nation and will also cost mortgage borrowers more money when they go out and get a mortgage because a lot of mortgages are tied into the government by way of Fannie Mae and Freddie Mac, so it’ll cost more for Fannie Mae & Freddie Mac to issue bonds on the bond market,” said Nicholas.
Marla Thomas, Virtual Loan Officer with Providential Bankcorp, said we can expect to see an increase in interest rates if there is not a settlement in the debt crisis.
The bond rate dropped 15 points on Friday. “If they don’t have an agreement by Tuesday, our bonds will skyrocket and interest rates will rise. We could see over eight percent (on fixed and adjustable index rates) easy, maybe even higher,” said Thomas.
Thomas says it’s not just home loan rates that will increase, we could see credit card and car loan rates rise as well.
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