AbilityBlog.com

If we use history as a barometer, we have already hit the lowest rates ever. Over the last 40 years the lowest long term fixed rates were around 4.25% on a 15 year loan. Today we are at 4.25% on a 30 year loan in some scenarios. What is the risk with locking a loan in the 4 percent range? Nothing, the chance of 3% mortgage rates is highly unlikely. I say unlikely, but nothing is out the question in this market. Let’s look at the benefits vs. risk. If you lock in today you have the lowest rates offered in modern tracking history. If you feel like gambling, you could possibly capture an even lower rate. So why not wait? The downside is rates could go higher, you could miss the low 4% rates altogether. The difference in payment with these rates is not worth missing out this time around. We are talking about 4% rates, no buyers remorse with rates this low! Congress is reviewing the “cram down” portion of the stimulus bill this week. If passed, mortgage rates will go higher. Fannie and Freddie have also announce price adjusters to borrowers with scores less than 740! That would be most of the U.S.. Stay tuned for more updates on the “cram down”.

According to the most recent data released by the National Association of Realtors, Home sales Rose 6.3 percent in the month of December. The forward looking indicator used in the study was housing contracts sign in the month of December 2008. This data indicates that the government is finally reaching a point where people are responding the attractive buyers market they have created. The government has made it known that they are using every weapon in their arsenal to test the elasticity of the US housing market. This is a huge success for the US Government that is working at break neck speeds to try and solve our current financial crisis.