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Could Interest Rates Get Even Lower?

numberone-moneyIf you’re buyer has ever mentioned borrowing from a credit union, now is a great time for them to act on it. According to Bankrate, the National Credit Union Administration (NCUA) gave authorization to all credit unions in June to securitize and sell loans that they originated. However, the legal opinion letter from NCUA said this technically was allowed this whole time.

"NCUA has been asked whether a federal credit union (FCU) currently has the authority to issue and sell securities under the Federal Credit Union Act (FCUA) and NCUA’s regulations, or whether statutory or regulatory changes would need to be made before an FCU could engage in such activities,” the letter said. “Consistent with the FCUA and NCUA’s regulations, it is the opinion of NCUA’s Office of General Counsel that an FCU does have the authority to issue and sell securities as a power incidental to its operation, and, in the case of Government National Mortgage Association (Ginnie Mae) securities, as a power expressly authorized under the FCUA.”

The short version: Bankrate.com says the allowance of more money to your credit union could work in your advantage, especially with mortgage rates predicted to stay at their current lows. With that being said, it wont be until close to the end of the year until the details and guidelines are released.

Credit unions will have more ability to make loans with this authorization, but it could also mean slipping rates.

“Because lenders would be more fully engaged and more efficient, there’s the potential for lower interest rates,” said Mike Schenk, VP of Research and Policy Analysis for the Credit Union National Association to Bankrate. “I don’t at the moment think that with rates as low as they are that you would see dramatic declines in rates.”

According to Bankrate, the time buyers could wait for the drop in interest rates would better be spent eliminating debt, especially if the Federal Reserve decides to raise its benchmark rate a third time this year.

About Author: Brianna Gilpin

Brianna Gilpin, Online Editor for MReport and DS News, is a graduate of Texas A&M University where she received her B.A. in Telecommunication Media Studies. Gilpin previously worked at Hearst Media, one of the nation's leading diversified media and information services companies. To contact Gilpin, email [email protected]

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