
If you have been reading the financial headlines, you could reasonably think that nearly all lenders are going broke, nearly all mortgages are in default, and that no homebuyer or real estate investor stands a chance of getting a new loan or refinancing an existing mortgage.
Here's the Real Story
First, contrary to the dominant news stories, it's a promising time to be a creditworthy borrower. As property sales volumes have fallen, mortgage loan originations have fallen in tandem. Likewise, stricter underwriting standards for home equity loans and high existing LTVs among many property owners have reduced this potential market. So, many lenders are receiving too few loan applications relative to the amount of funds they would like to lend. Remember, to thrive and survive, lenders must loan. Loans are the products that lenders sell.
Therefore, if you are a creditworthy borrower, lenders are begging for your business - especially 80% LTV, 30-year fixed-rate mortgages. Do you have a good, stable income? Cash reserves? Credit score above 680, say? Lenders will offer you rates and terms better than any I've seen since 2004. And even if you do not present a perfect cash/credit profile, you can still look to FHA for excellent home financing. In fact, many sad borrowers who were lured into ill-advised subprime and option ARM products could have qualified for much superior, lower-cost FHA programs.
Third, some alternative products are worth investigating. If you'd like to build equity faster, pay off your loans sooner, and reduce mortgage-borrowing costs at the same time, now could be the time to act. Lenders are offering attractive rates on 15-year mortgages. Or investigate the 5, 7, or 10-year hybrids.
For a majority of potential borrowers, the doom-and-gloom news reporting signals opportunity, not despair. Falling interest rates and declining mortgage originations provide credible homebuyers and investors their best chance to borrow in several years.
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1 Comment
Please let me explain:
Rates were lower for a two fold purpose.
1-help solve the mortgage meltdown
2-help businness recovery
Let's adress ONE. first:.
Help solve the HOUSING meltdown.NO ,instead it is helping the new breed of greed to get low cost money to buy.NOW you tell me when you heard an investor offer more than the last sale price.Donald would say "not to smart a negociator"It it's not bad enought that the last sales were 20% lower.The new breed will offer less,the lower cost money will just feed the greed.
The more foreclosures the lower the price and as a direct result (this statement is from the FEDS)" it is expected that for the first time since records have been kept that homeowners
could 'OWE MORE THAN THE EQUITY IN THEIR HOMES'"
Another stat---Home prices have declined at such a rate that has not been seen since the Great Depression.(Caps as per Andy Rooney)
How GREAT A DEAL is the lower rate for this new breed of greed shoul homes decline as projected by some an additional 26%.OPPS UPSIDE DOWN.
The Feds must consider a EVERYBODY WINS plan.
A PLAN that will require lenders to issue a moritorium on
FORECLOSURES AND SHORT SALES
NOW number 2:
Help to hold off resession.Well why the "Stimulus " package?If housing were stable,that certainly would be enough of a gift.
Also what about the ability to fight INFLATION? INCREASE rates-so if inflation is increasing,
you know like GOLD at almost historic highs,OIL at $100 a barrell,All GRAINS up,up and away.Wouldn"t a rate decrease be inflationary?
PLEASE AMERICA QUESTIONS.
Carmen Basilovecchio
check my site cbasilovecchio.com