While the media and Washington continue to chatter about the mortgage market , interest rates are currently near or at all-time lows. If you or anyone you know are looking to take advantage of these low rates, let me explain why NOW is the time to act.

You may have heard the talk lately about the 4.5% 30-year fixed rate mortgage. Will it become a reality though?  Right now, no one really knows.   Here’s what is interesting.  The Fed only has the ability to control the Fed Funds Rate, which generally has the opposite effect on long term home loan rates.

It is unclear how the Fed can possibly set a 4.5% interest rate.  Homeowners who could benefit from a lower interest rate need to know that even if 4.5% becomes a reality from Washington's actions, it would only be available to home buyers, not homeowners seeking to better their rate. If you need to refinance, you will be left out.

What has occurred thus far is the Fed announced recently they would begin buying up to $600 billion in mortgage backed securities (MBS).  This announcement has already driven rates to historical lows.  How?  It assured traders that if they need to sell, the government would be there to buy.  So traders jumped back into the market and began buying with a big appetite which improved home loan rates.

You also may have heard about Hope for Homeowners, which is a program approved by legislators to help distressed homeowners. However, regardless of its best intentions, the program has not been embraced by investors, and it is not available to many it could help.

In January, the SEC is meeting and information may be released that could have a significant bearing on rates, potentially for the worse.

Waiting to obtain the best rate is only possible for those with loan applications already in process. Interest rates are incredibly volatile and fluctuations that used to take months are now occurring in just days or sometimes even hours. If you don't have an application in process, you could lose out.

Lenders are already becoming backlogged due to low interest rates. In 2003, with rates at these same low levels, we saw some lenders taking up to 90 days to close a loan.

Home loan rates are currently in the mid- to low-5% range. Home values are currently at 2003-2004 levels, coming down significantly from their high point. If you–or friends and family members you know–are contemplating seeking financing, now is the time to act.  Gather your paperwork and get your application in process so you don’t miss out. 

With a first time home buyer tax credit of up to $7,500 and low or no money down programs available for many people today, now is a great time to buy a home.

If you have any questions about how we can help you, call me today.  To begin your application now, just click on "Apply Now", then "Apply Online."