So the predictions came true and the United States' credit rating was downgraded from AAA to AA.  What does that mean to you, a consumer and homebuyer?  MSN Money compares it to our nation's collective credit score of 850 dropping to 720. If you've ever seen a freecreditscore.com commercial you know what those numbers mean.  It's equivalent to having a perfect credit record and dropping to a very good score. Joe Buyer could qualify for a competitive loan program with a 720 credit score. So, is the downgrade really that bad?  And again, what does this credit downgrade mean to you as a consumer?

 All the financial analysts are predicting that in the near future we will see the interest rates rise in response to a decline in consumer and investor confidence. These same analysts foresee the higher interest rates for all loans and lines of credit will increase the cost of doing business which will in turn be passed along to you, the consumer, as higher prices when you shop. Higher homebuying costs are concerning and would not help in the U.S.'s economic recovery but the psychological impact of our credit downgrade could be more harmful to the public and could cause a greater stall in our recovery than simply higher interest rates do. It is one thing for Americans to see our economy failing and holding out faith that we are on the road to recovery because we’re a strong and powerful nation, and a completely different thing to confirm we’ve lost our footing on a global scale and continue to have faith in the recovery.

Rising interest rates and taxes are concerning predictions. However, as of today, be encouraged as interest rates are amazingly low! 30 year fixed are down to 4.31% and 15 year fixed to 3.48%!  If there was any thought of refinancing your existing loan or making a move to a new home or purchase of an investment property, don’t hesitate! Take advantage of the recent drop before the interest rates start moving back up and keep your eye on the market as it responds over the next few weeks to the downgraded credit rating.