Mortgage News Continues to Show Mortgage Rates Going Down
Posted on | May 23, 2009 | 8 Comments
Daily mortgage rates news gives you, the reader, a chance to stay up to day on all mortgage and real estate news. Today we analyze the trend of mortgage rates going down.
Over the last sixth months, most mortgage news articles have illustrated that mortgage rates have been steadily falling. There is no doubt that this is the truth as rates have went from 5.92% to 4.81% in just one year. This dramatic fall has been greatly aided by the drop in home prices and the subsequent assistance of the government. When the federal government has committed to buying $1.25 trillion in mortgage backed securities we can only expect mortgage news to be reported about one thing; lower mortgage rates.
Now that mortgage rates are hitting historical lows, what does it mean for the common American. Well, that is going to be determined by the financial decision you have made in the recent past. I will be the first to admit that being extremely frugal and spending no money will not make anyone happy. With that being said, it is not wise to spend every dollar you earn months before it is even in your bank account. There must be a happy medium and those who found that happy medium before the subprime mortgage crisis are probably sitting pretty as far as finances are concerned.
If the loan-to-value ratio of your current home is less than 70% and you have a credit score over 740, you are likely to have the opportunity to refinance at extremely low rates. Not only are you able to refinance at low rates, you will also get much lower rates on credit cards and vehicle loans. The one thing that this struggling economy is doing is rewarding those who have made financially intelligent decisions. Each and every day I get a credit card offer for 2.99% if I am willing to spend ANY money on the card.
I do not always take these offers as having too many credit cards hurts your credit score but it is very alluring to basically get “free” money because of the strong financial decisions I made in the past. The same holds true with the mortgage market. The government is forcing lenders to offers extremely low rates by keeping the Fed Funds Rate at basically zero which means the government is loaning money to the banks and financial institutions at no interest. If the banks can get money at no interest then they are going to give it to everyday Americans at a very low interest rate.
Well, a very low interest rate will go to those who have earned it. I think we all know friends and family who have tried to refinance in the last six to twelve months who have been told that their refinance rate is not going to be much lower than their original mortgage rate. The old saying “what goes around comes around” definitely holds true in financial markets. If you have made poor decisions in the past by spending money you didn’t have or avoiding taxes you are going to pay in this economy.
One of the most interesting aspects about mortgage news is the amount of media outlets that are now reporting on the real estate and mortgage market. Almost every single major media outlet has an entire section or page just on housing and mortgage rates. There have always been news outlets for this information but never so much as today. It seems that every single day that front page news involves the mortgage market in some way. When mortgage rates are consistently hitting an all time low the lenders are ramping up their advertising and pushing for media sources to stay on this topic.
The summer months are always a time when the real estate sees a bit of renewed interest from the public because most families move during these months so their children are not affected when it comes to their education. “Homes for Sale” sees a pop in searches during the summer months and then fades as the fall and winter months roll in. It will be very interesting to see if that is the case this year as the global economy is unlikely to recover that quickly. If the Federal Reserve Bank continues to sink large amounts of money into mortgage backed securities as they have been, will the interest in the housing market continue?
The Fed sure hopes so because that is the point of committing $1.25 trillion into mortgage backed securities. By doing this, mortgage rates are almost sure to go down which will cause a great interest in buying or refinancing a home. We have already seen the increase in mortgage applications but it seems to be the case that most of the applications are for refinancing. Refinancing helps many Americans put more money in their pockets but does it help the housing market at all?
I would argue that it does not. The housing supply that has been the cause of this meltdown is still on the market. If people are refinancing their current homes they are not buying new homes. The only way to get the supply and demand back in balance is for Americans to start buying the homes in which no one is living. Some would argue that if individuals are refinancing and saving money they are likely to buy a second or third home with the extra savings. This may happen, but how many people are actually considering investing even more money into a real estate market that has lost them tens of thousands over the last three years.
Ultimately, mortgage news outlets report what is popular. Right now the fact that mortgage rates are at historical lows is the most interesting thing that has happened in the housing market since the bubble burst back in June of 2006. After all the negative sentiment for over two years many media outlets are trying to produce content that is uplifting to the American consumer. There is no doubt that historically low mortgage rates are very good for most Americans. If you are one of the Americans who has been very smart with your financial decisions take advantage of this opportunity and get the lowest mortgage rate of your lifetime.
Tags: mortgage market > mortgage news > mortgage rates down > mortgage rates going down
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May 23rd, 2009 @ 6:37 am
[...] post: Subprime Blogger / Mortgage News Continues to Show Mortgage Rates … This entry was posted on Saturday, May 23rd, 2009 at 7:07 am and is filed under [...]
May 23rd, 2009 @ 6:41 am
[...] here to see the original: Subprime Blogger / Mortgage News Continues to Show Mortgage Rates … Related Posts:Subprime Blogger / Daily Mortgage Rates News – How Low Will Rates Go?Subprime Blogger [...]
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May 25th, 2009 @ 1:23 am
[...] Random Feed wrote an interesting post today onHere’s a quick excerptOver the last sixth months, most mortgage news articles have illustrated that mortgage rates have been steadily falling. There is no doubt that this is the truth as rates have went from 5.92% to 4.81% in just one year. This dramatic fall has been greatly aided by the drop in home prices and the subsequent assistance of the government. When the federal government has committed to buying $1.25 trillion in mortgage backed securities we can only expect mortgage news to be reported about one thi [...]
June 18th, 2009 @ 11:20 am
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June 18th, 2009 @ 6:14 pm
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June 19th, 2009 @ 7:17 am
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June 19th, 2009 @ 11:24 pm
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