Mortgage Rates Below 4%?!?
Posted on | December 11, 2008 | 9 Comments
The Treasury Department has strongly considered creating a nationwide program to lower mortgage rates but would the program would not apply to refinanced loans. The plan comes on the heels of a huge increase in the number of new home cancellations in 20 major United States markets. Several government officials feel strongly that mortgage rates will drop below 4% in the future, but did not give a time frame. It might be sooner rather than later as mortgage rates have dropped to as low as 5.49% for a 30 year fixed rate mortgage.
The catch 22 to lower mortgage rates is that the price of homes will decline at a much slower rate. This could cancel out the effect of lower rates on the economy. With mortgage applications once again dropping over 7% last week, something must be done to stimulate the mortgage market. The question is, should rates be lowered which will stabilize housing prices or should rates remain the same while housing prices decline?
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9 Responses to “Mortgage Rates Below 4%?!?”
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December 12th, 2008 @ 11:14 am
This is great news! It’ll be interesting to see what else changes.
December 12th, 2008 @ 5:50 pm
[...] For the sixth straight week, the 30 year fixed rate mortgage declined. This week it decreased from 5.53% to 5.47%. In October, the 30 year fixed rate was almost a full point higher at 6.46%. The actions by the government are proving to work as this is a four year low. The strong actions by the government could very well push rates below 4% as stated earlier this week on Subprime Blogger. [...]
December 13th, 2008 @ 12:26 pm
“… The question is, should rates be lowered which will stabilize housing prices or should rates remain the same while housing prices decline?”
Allow prices to fall back to where they really should be. A house is just that – a house. They’re not money trees or personal piggy banks.
December 19th, 2008 @ 7:33 pm
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Deborah
http://termlifeinsurance2.com
January 7th, 2009 @ 8:07 pm
A home is not a personal money bank? Well, a home IS a person’s principle investment in most cases and is a source of wealth. The equity in a home can often be used for college expense, home repairs, etc. Is there something wrong with people borrowing against their equity? I am not talking about the crazy situations where people try to live off the equity of an over-valued home, but the basic second mortgage or home equity loan. Many college students would not have been in school this year due to a dirth of student loans had it NOT been for the ability to borrow against the equity in one’s home. The consumer didn’t over inflate the market, the banks did. A house is more than a house–it is an investment.
January 16th, 2009 @ 1:26 pm
Will the banks really pass < 4% rates to consumers?Last I checked, with 2.75 points, I was getting a rate of 4.25, but not less than that.
January 17th, 2009 @ 4:22 pm
[...] of all, we would like to thank Kevin and Mark for posing the questions about refinancing under 4%. There has been mention that mortgage rates will fall as low as 4% and we know many of our [...]
February 18th, 2009 @ 2:28 pm
Very very very interesting,i will definitely have to bookmark this page….just such great stuff you bring up…there is always more to learn.
March 6th, 2009 @ 10:52 pm
I know of a website where lenders can find borrowers with bad credit yet still have enough equity to arrange hard money loans or possibly FHA. There use to be very intense competition on mortgage leads 2 years ago. In 2008 between 80%-90% of the brokers left the mortgage business. As of March 2009 only handful of good lenders/brokers can enjoin very excellent leads almost exclusivity in certain part on the country. When it comes to bad credit situation borrowers find solution by searching many sites and many lenders. Borrowers with bad credit are no longer asking “Where I can get the best rate”, but “where can I find a lender who can do my loan period”. lendinguniverse.com started 10 years ago and now is looking for good lenders to join and more borrowers with bad credit residential or commercial to bestride the software.