Alan's Blog

Will We See 4.5% Rates For 30 Year Mortgages?

The hot news in the market today is a plan that has been "leaked" from the Treasury Department that it is considering enacting a plan that would reduce mortgage interest rates to as low as 4.5%. This plan is being considered as a way to stimulate the real estate market and put a floor on housing values.

Under the proposed plan the Treasury would buy mortgage-backed securities that were issued to finance loans used for home purchases only. The mortgage-backed securities to be purchased would be those issued by Fannie Mae, Freddie Mac and the Federal Housing Administration. The majority of mortgage loans could be covered by the new program. 

Unlike a lot of loans made over the past several years, borrowers would have to qualify for these new loans. Income would be verified, assets to purchase the property would have to be proven and the borrowers credit would have to meet current standards.

As I understand what has been "leaked" so far the Treasury hopes this plan would halt the decline in home prices by allowing home buyers to afford larger loans resulting in an increasing demand for houses which will result in raising home values.

I'm sure there is a lot of negotiating to be completed before this plan is released. It's important not to get too excited before the final details are known. There is always the chance that the plan will not be approved and all the excitement generated by the press will be for naught.

One thing is clear. One of the major ways to turn around the economy is to get the real estate market moving in a positive direction. The problems started in the real estate market and the improving the real estate market needs help lead the economy out of the recession.

I am always available to answer any questions you have concerning interest rates or mortgage loans.

Alan Gross
Home Office: 301.353.9360
Email: mtginfo@aol.com
Web: www.mtg-info.net

Mortgage Interest Rates Drop!

On December 16th the Federal Reserve (FED) dropped its target for the Federal Funds Rate from 1% to between 0 and 0.25%. In addition the FED pledged to use "all available tools" to fight the current downturn in the economy. Based in it's statements the FED plans to keep interest rates at "exceptionally low levels: for some time to come.

In the past the FEDs cut in the Federal Funds Rate has not always translated into lower mortgage interest rates. In this case the announcement had an immediate effect and mortgage interest rates showed an immediate decline.

Mortgage interest rates are now at all time lows. Unlike the past when mortgage rates were the same for everybody, mortgage interest rates are now priced based on factors such as loan amount, credit score, loan purpose and loan to value. Call me so we can determine the interest rate for your particular situation.

As has happened in the past, these low interest rates will cause a flood of new mortgage applications. The crisis in the mortgage market over the past few years has caused many mortgage companies to close or cut back on staff levels. Don't wait until you feel interest rates are at the bottom to get your application started.

Whether your looking to buy or refinance, call me today. I'm here to help. The best place to reach me is at my home office 301.353.9360. You can also email me at mtginfo@aol.com

Have a safe and happy holiday season!

Alan Gross
Home Office: 301.353.9360
Email: mtginfo@aol.com
Web: www.mtg-info.net