Rising Interest Rates And Bond Prices Analyzed By LoanLove.com

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SAN DIEGO, May 21, 2014 /PRNewswire-iReach/ -- LoanLove.com is a borrower advice website that offers in-depth information on home loans that experienced home buyers can benefit from in an easy-to-understand and entertaining way that even first-time borrowers will be able to grasp. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending news, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. The latest in mortgage loan advice articles from Loan Love takes a look at the history of rising interest rates and bond prices and what loan borrowers can expect in the near future.

It is well known that the Federal Reserve will be cutting back on its purchases of bonds, while interest rates will continue to rise. But what exactly is causing this rise in interest rates? Loan Love's latest article "Rising Interest Rates And Bonds (Who's to Blame?)" states the following as to why interest rates are on the rise: "Fluctuations in interest rates come about due to a variety of economic factors. In fact, both short- and long-term rates are affected by such things as the strength of the dollar, inflation, and the overall pace of economic growth.

"The article continues by explaining the lingering effects of rising interest rates such as their potential threat to bonds. Specifically, if a loan borrower owns a bond and the market has a sudden increase in interest rates, the value of the bond will plummet. Nevertheless, it is important to note that an increase in interest rates doesn't always mean a bond will be ruined. Usually when a bond matures, the value isn't going to change much whether interest rates change or not. Bonds for investment purposes on the other is an exception to this, where interest rates are pivotal in determining the strength of the bond.

Also explained in the article are the ups and downs of bond prices and the circumstances that influence them while giving readers a forecast on where interest rates may be heading. Loan Love's article states: "The housing meltdown and economic downturn brought about historically low interest rates as part of the government's attempts to heal the economy. The economic recovery has been steady, but slow, so that low interest rates remain even as the housing market has begun to gain strength. While it is expected that bonds will drop as interest rates rise, there is some evidence that investors need not necessarily begin selling their bonds.

"With all that has been mentioned, Loan Love urges loan borrowers not to worry too much on bonds weakening in 2014. The article elaborates this further by saying: "Virtually any 2014 financial outlook you cared to browse predicted higher interest rates ahead. But so far, increases have been less than newsworthy. Nonetheless, most investors are still anticipating that average rates will rise over the next five to 10 years.

The housing meltdown and economic downturn brought about historically low interest rates as part of the government's attempts to heal the economy. The economic recovery has been steady, but slow, so that low interest rates remain even as the housing market has begun to gain strength."For more information on rising interest rates and bond prices, please visit LoanLove.com to read the complete article.

Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, contact@loanlove.com

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