Great Britain’s exit from the European Union (Brexit) has been dominating the news lately. The global ramifications of the exit are being still debated amongst economists, although the long-term effects will most likely take years to reveal themselves fully.

Locally though, what can State College and Centre County residents expect from this faraway news? Will there be an impact from the Brexit on State College mortgages?

D. Shane Whitteker is the owner and chief broker at Principle Home Mortgage, a mortgage company in State College, Pennsylvania. He believes the Brexit will actually benefit anyone looking to get a mortgage.

A Flight To Safety

“One aspect of the Brexit that is a benefit for homeowners or potential home owners is the fact that the concern over potential financial impact of the British exit from the European Union has caused the mortgage bond market to have decreased yields which allows for decreased rates.”

According to Whitteker, this phenomenon is referred to as a “flight to safety”, the tendency for investors to seek fiscal refuge in the bond market, to the benefit of anyone seeking a mortgage.

“Bonds in general are considered to be a less risky asset than other financial products like stocks,” Whitteker says. “So when the financial markets react with concern over future economic activity and future earnings we see investors bringing large sums of money over to the bond market pushing the price of bonds up and pushing the bond yields (rates) down.”

Lower rates mean opportunity for anyone who owns a home, and anyone who wishes to own one.

“If you currently have a mortgage, right now is the time to consider reducing your rate or to consider pulling equity in the form of cash out while rates are low,” Whitteker says.

Good News For Current & Prospective Homeowners

Lower rates are good news for potential homeowners and current homeowners alike.

“In the short term this increased bond activity creates the ability to purchase a home with less expense in interest payments,” Whitteker says. “In the long term, it also will most likely help home values to increase due to the increased demand for homes associated with lower interest rates.”

To learn more about how lower interest rates make now a great time to think about getting a new mortgage or refinancing an already existing one, contact the mortgage experts at State College based Principle Home Mortgage today!