Mortgage interest rates hit the bottom

GetPrequalified.com is making its official statement that this is the bottom of the mortgage interest rates. Rates wont be going any lower. If you have been waiting to refinance your home or buy a home, you may not want to wait any longer. If you are waiting for lower rates, you may be disappointed by getting higher rates in the future.

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Mortgage Rates could be in for a bumpy ride

The stock market has been on a wild ride of late. Mortgage interest rates have also been along as a passenger with the market. I have seen .25% swings in one day. If you are in the market for a new mortgage, you need to pay attention to the stock market. I recomend being in close communication with your mortgage broker or mortgage banker about locking. One hour can make a big difference if the market decides to take a tumble or surge. You need to be ready to act quick because mortgage rates don't seem to stay in one place for very long.

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Interest Rates may have hit bottom according to the Federal Reserve

The fed made it's quarterly speech yesterday. It appears they are taking the stance of no further rate cuts. The market is now on its own. If you are waiting for interest rates to go any lower, they wont. If you think Obama is going to win the election you better refi now. I don't think interest rates are going to go any lower at this point.

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Get to Know the Power of FSBO - For Sale By Owner

If you are considering selling your home on your own, aka For Sale By Owner, or FSBO you should read this article. It is gratifying to sell your own home, but there are some things you ought to know before you set out on this journey.

See GetPrequalified.com's other Articles on Selling a Home

Fed Drops the fed funds rate by an quarter of a point

The Federal Reserve Chairman Ben Bernanke announced today on a Sunday meeting that the central bank rate will be lowered a quarter of a point to 3.25% from 3.5%. The action was meant to provide additional liquidity to banks and lending institutions. The JPMorgan merger with Bear Stearns was also announced as well.

Should we just let the market handle the mortgage meltdown or should the government continue to act?

Hold on to your hats, this may not have any impact on mortgage interest rates at the consumer level. If you look at what this years fed cuts have done for mortgage interest rates, you will see that there really hasn't been any significant lowering of rates at all. Don't get lured into any fancy advertising that alot of the banks and lending institutions will be running.

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What Interest rates have to do with the current housing market

Over the last few weeks the Subprime mortgage market has been devastated if not killed off. We have seen multiple companies go out of business. Large players such as Novastar, New Century and even First Magnus have gone into bankruptcy. Even Countrywide the nation’s largest mortgage lender is teetering on financial disaster. We are now seeing the impact of these high risk loans play out in the real estate market as well as on Wall Street. The panic over the liquidity in the mortgage markets has definitely spilled over into the real estate market in a big way. If you look at the run the real estate market had in 2004 & 2005, the market force in the market was the availability of multiple loan programs and low interest rates. Low interest rates made it cheaper to buy a home than to rent. In this time many people were buying homes on first lien home equity lines. If you look at the prevailing rates for these home equity lines, they were around 4.25%. If you compare the same rate for that mortgage today you would be at 8.25%. Not only was money cheap but you could even buy a home with no money down and no proof of income, employment or assets. No documentation loans made it easy for anyone with high credit scores to obtain a mortgage. Many of these buyers had no business buying a home. They could buy because they could. The rules for lending have changed. That type of borrower will no longer be able to obtain this type of financing. You must now demonstrate your ability to repay your mortgage.

What does all of this mean to the current real estate market? Since the Subprime meltdown, mortgage companies have pulled back on the types and loan to values of mortgages they are offering. It is no longer enough just to show up at the closing table with your good credit score. You must demonstrate your ability to repay the loan. The no documentation or liars loans, as they are often referred to have disappeared. The 100% financing loans have also begun their recession. Borrowers will now have to have some skin in the game. Many of these high risk loans had borrowers bring no money down to the transaction. If things get bad, there is nothing to loose. Walking away from the situation is easy. It is true that you will end up with a foerclosure on your credit report, but the impact is still less than a bankruptcy. If you have put a down payment down on a property, a borrower would be more inclined to try to work it out and try to keep the property rather than to just walk away.

If I am selling my home what does this mean to me? What it means is that the pool of buyers has shrunk considerably. The tighter the lending guidelines get, the fewer buyers there will be to potentially buy your home. You might expect to see the value of your home drop as well. It is just simple economics. As demand goes down and the supply goes up, your home becomes worth less. If you don’t need to move don’t. If you do, you may want to consider renting. Real Estate cycles don’t last forever and it is likely market conditions will change in a few years.

If I am a buyer what does this mean to me? If you are in a position to buy, you may not have a better time to purchase a new home. With low interest rates, lower property values and anxious sellers abound, you may not find a better time to buy for years to come. There are still many programs that will allow you to buy with no money down. You may want to talk to your real estate agent about negotiating a seller to pay for your closing costs. Many Fannie Mae loan programs will allow a seller to pay for up to 6% of your closing costs. This would be enough to pay all of your costs and even buy your interest rate down to a more attractive rate. Sometimes the best time to buy is when nobody else is. The deals of a lifetime could possibly be right under your nose. At some point you need to give up the fact that this in not 10 years ago, it is now and these are the market conditions. You may kick yourself in another 10 years and say why didn’t I act then. Following the flock may not get you want and it may not be prudent. Trust you gut and make your move. Life is risky, but owning property over the long term is usually a winning proposition.

For more information on Fannie Mae 100% financing please visit GetPrequalified.com. While you are there you can check your credit and find other valuable financial services to assist you in the home buying process.

DebtFreeDave
Mortgage Broker

Universal Default Rate on Credit Cards, Suze Orman

I got a good tip from watching Suze Orman the other night. Consumers don’t realize that when you default on one debt it can affect other credit use. There are a lot of people that are losing their homes due to foreclosure. They feel that the mortgage is hopeless yet they want to keep their credit cards for emergency use. While this is understandable, consumers fail to realize what the impact to their credit is across the board. Your creditors are checking your credit all the time. If they see that you are having trouble on one of your credit accounts, they have the right to raise your credit card interest rate to the universal default rate. It is in your contract. If you don’t believe me, then believe Suze Orman. I’ve seen her tout this fact a few times on her show. Your rates can go as high as 29% just because you are late on your mortgage. The reality is that you need to keep up on everything. If you are having financial difficulty you need to be aware that your credit cards may not be your safety net.

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