Thu, December 18th, 2008
DREAM BIG–INTEREST RATES TUMBLED!

Mortgage rates at 37-year low - If you are dreaming about a new home, your dream can become a reality!  Interest rates reached historical lows this week.  Read the following which was posted by the AP today: 

WASHINGTON (AP) - Rates on 30-year-fixed mortgages dropped this week to their lowest levels in at least 37 years, as the Federal Reserve pledged to pour money into the mortgage market in an effort to spur the sluggish U.S. housing market.  Freddie Mac, the mortgage company, reported Thursday that average rates on 30-year fixed-rate mortgages dropped to 5.19 percent, down from the year’s previous low of 5.47 percent, set last week.  The rate is the lowest since Freddie Mac’s weekly mortgage rate survey began in April 1971.

Mortgage rates started falling after the Federal Reserve launched a sweeping new effort in late November to aid the U.S. housing market by purchasing up to $600 billion of mortgage-related securities and other debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.  A daily survey found that the national average rate fell even lower Wednesday. Rates on 30-year, fixed mortgages was 5.06 percent, according to financial publisher HSH Associates, the lowest since the 1960s and down from 5.3 percent Tuesday.  It was the best news in months for anyone looking to lock in a 30-year, fixed-rate mortgage. But it was not expected to be a cure-all, and borrowers already in danger of foreclosure probably won’t be able to take advantage because only borrowers with stellar credit can qualify.  “It’s a call to action for homeowners looking to get out of adjustable-rate mortgages,” said Greg McBride, senior financial analyst at Bankrate.com. “Unfortunately, it’s not an equal-opportunity party.”

Meanwhile, rates this week fell on 15-year fixed-rate mortgages to an average of 4.92 percent, down from 5.2 percent last week, Freddie Mac said.  Rates on five-year, adjustable-rate mortgages fell to 5.6 percent, compared with 5.82 percent last week. Rates on one-year, adjustable-rate mortgages dropped to 4.94 percent, from 5.09 percent last week.  The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 point last week. The fee on five-year, adjustable-rate mortgages averaged 0.6 point, while the fee on one-year adjustable-rate mortgages averaged 0.5 point.  Mortgage application volume jumped last week, fueled by borrowers seizing on lower rates to refinance home loans, the Mortgage Bankers Association said Wednesday.  The trade group’s seasonally adjusted application index rose 2.9 percent for the week ended Dec 12.

The Federal Reserve, aiming to free up lending and jolt the economy back to life, on Tuesday cut the federal funds rate from 1 percent to a target range of zero to 0.25 percent and pledged to keep funneling money into the market for mortgage investments.  Mortgage brokers are already reporting a surge of calls from borrowers trying to take advantage of the Federal Reserve’s extraordinary actions.  On Wednesday, some mortgage brokers were quoting interest rates of close to 4.5 percent for people with strong credit and hefty down payments.

Falling interest rates mean Americans could suddenly find billions of extra dollars in their pockets at a time when consumers have sharply cut back on spending in the face of rising unemployment and declining household wealth.

The inventory is great, sellers are motivated, interest rates are low.  So, tell your sons and daughters, friends, and acquaintances the window of opportunity is now!

Posted by Christina Rickey at 12:07 | Permalink |