Thanks for stopping by my new blog. I will update this blog at least every week with information regarding home mortgage rates, new guideline requirements, appraisal issues, unique scenarios, etc. My goal is to educate the real estate community and potential buyers and sellers in all aspects of mortgage financing. It is always important to have a fundamental knowledge of the mortgage markets before entering a real estate transaction. And for all the Realtors out there...we know that every loan you have is unfortunately not as smooth and perfect as the ones we do (wink, wink) and in those cases hopefully you can find some answers here. Once again, thanks for stopping by and I look forward seeing you on the blog. Fill out the poll question to the right and I will use the answers to help fill content!
For now, my first post will be directed towards all of the FENCE SITTERS and agents with FENCE SITTERS in your Rolodex (do people still use Rolodex's?). There are a lot of reason why potential home buyers hesitate in making a decision. Each one of the reasons is very real to the people that are feeling it, and those reasons need to be understood so we can find out if the reason for hesitation is valid. We are in a unique spot right now in that those that hesitate may just price themselves out of the market all together, and here is why:
The main reason has to do with mortgage interest rates. The FED is ending their presence in the mortgage secondary market. This secondary market is where mortgage backed securities (Large bundles of mortgage loans) are sold. This market used to be filled with Pension Funds, Hedge Funds, private investors, etc. Once the market collapsed, everyone left the mortgage secondary due to increased risk. That is when the government stepped in last year and dedicated 1.25 TRILLION dollars towards the future purchase of mortgages. The prices these mortgage fetch on the secondary is what drives current mortgage rates. Because the FED has been paying above market prices for these securities,rates have been artificially low over the last 12 months. The 1.25 Trillion is expected to run out at the end of March, and according to the FHA commissioner, a "healthy" increase in rates overnight will be half to three quarters of a percentage. Any more than that, and you may see the FED re enter, but for now they are out. Make no mistake, we will be entering a rising rate environment. TAKE ADVANTAGE OF RATES YOU WILL NEVER HAVE TO REFINANCE. Once the FED exits the secondary will be filled with private investors who demand much more return for their money, which means higher rates.
Also, the tax credit is set to expire. If you are not under contract by April 30Th you miss out on $8,000 from the federal government. This is not an 8K tax deduction, this is a credit. It is a free 8K back to you! This can replenish most borrowers down payments in our current market. This program WILL NOT be extended.
Check back soon!
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We lost .375% in rates today across the board. FED support for mortgages is starting to be non existant. If you did not lock today, you just got hurt pretty bad.
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