Yesterday morning, many of us read in our morning papers that rates were going to quickly going down to 4.50% and my office received several calls from buyers asking advice if they should wait to lock their loans.
Apparently this was not a story that was supposed to get out but the US Treasury is in discussion about encouraging banks to supply rates down to 4.500%. According to several reports, the Treasury Department is considering a plan to drive down mortgage rates as low as 4.5%. It would do this by purchasing mortgage-backed securities from the now nationalized Fannie Mae and Freddie Mac.
This new scheme is apparently only for home buyers and will not available for bailing homeowners facing foreclosure. One report, last night, said the lower rates may only be available for new homes. Which will not help the existing homes values which is what needs propping up.
The ideas is that the lower rates will stimulate home sales, raising values, and indirectly help existing homeowners. this latest development from the Treasury comes on the heels of a similar announcement last week by the Federal Reserve that helped drive down mortgage rates.
Last week the Fed said it would buy up to $500 billion in securities from Fannie, Freddie and Ginnie Mae, the other government-sponsored mortgage financing firms. It will also buy another $100 billion in direct debt issued by those firms.
As a result, yesterday 30-year fixed-rate mortgage are now as low as 5.375%, down from over 6% before the Fed's announcement last week. And there was a more than two-fold increase in mortgage applications last week.
The premature news leak may, on the short term, destabilize the market by causing home buyers to hold their application for lower rate that may not materialize.
Encourage your buyers to apply for purchase loans. Yesterday (12-04-08) rates were 5.375% and if they do not lock their rate, based on the rumor, their rates could be lower. In any case, mortgage rates are close to their 40 year all time low.
Current rates and mortgage market news is always available at YourFhaGuru.com
Search Homes in Lake Norman NC
SEARCH LAKE NORMAN FORECLOSURES
Sandy McAlpine, GRI, ABR, CDPE, SFR Broker,REALTOR Licensed in NC and SC
McAlpine Properties
(704) 746-7513
Lake Norman Homes
Copyright 2008-2012, ALL RIGHTS RESERVED, by the Author - Sandy Aichner McAlpine
I can also assist buyers and sellers in Short Sales and Foreclosure sales and purchases.
Please call me If you have interest in purchasing or selling a home in Mooresville, Cornelius, Huntersville, Troutman, Denver, Sherrill's Ford, Catawba, Davidson, or Statesville, North Carolina!
