Well, the Fed has finally done something that should make all homeowners and prospective homeowners happy...they lowered their target for the Federal funds rate to 0%-25% While that does not DIRECTLY impact mortgage interest rates (and it would take pages of economic and fiscal speak to explain why) yesterdays' move HAS had a positive impact. Two weeks ago I was able to offer clients rates in the mid 5% range. This morning I logged into my favorite wholesale lender to see 4.5% with NO ORIGINATION FEE!!!! That's unprecedented.
Who benefits:
Existing homeowners in Spokane, Spokane Valley, South Hill, Mead, Nine Mile Falls, and other neighborhoods in Washington, Idaho, and California need to contact their favorite lender ASAP to see if they can benefit from a refinance. I've seen this refinance rush many times in the past and those that wait to call miss the low rate opportunity as lenders get inundated with loan applications. Keep in mind that lenders have been cutting staff dramatically the last few years so there is a shortage of true mortgage professionals still in business to help.
Prospective homeowners - this may be a once in a lifetime event. You've got foreclosures and FSBO's competing with the normal resale market creating a serious advantage in your favor. Throw in the low interest rates and you've got a unique opportunity that won't last long. If down payment is an issue - no worries. There ARE still some 100% financing options available (limited, I'll admit, but available none the less), and FHA loans only require a 3.5% down payment.
Real estate agents - look like a HERO to your clients! Proactively inform them of this sudden rate drop. If they've already locked in with their lender they need to have a conversation to see what can be done to lower the rate or maybe get a second opinion. If you have a database of past clients - notify them! What better excuse to contact your great clients than to save them some money. Well, I've got to sign off and get to work! Have a great day. If you have a home loan, you need to consider a refinance as well.
Michael,
Thanks for getting the news out there. Now is the time to buy.
As a side note, I made comment on another blog this evening about TILA. AR is growing and, as a result, regulatory agencies are now starting to scan through making sure laws and regulations are being followed. When advertising interest rates, please include the corresponding APR, down payment requirement and LTV.
Have a great night and enjoy the snow!
Maryellen
I sure wish I had a buyer ready to hop off the fence and get going NOW to take advantage of these rates. Honestly, could they possibly get any lower? Maryellen, that is great advice, because I often throw rates up on my blog because I find them so impressive. I will be more careful to include the APR, down and LTV. Rock on!
KMG Mortgage - Maryellen - thanks for stopping by and commenting. I agree with you 100% - now IS the time to buy.
Yep, TILA is critically important in protecting the consumer during the mortgage process. I've survived two state audits and a HUD/FHA branch approval audit ALL with flying colors! After 18 years in the business I'm still amazed at how complicated our industry can be with all the different state and federal regulations and laws.
Mike
Mike,
I can't agree with you more. Thanks for getting the word out about low rates! Congrats on surviving the audits. We have been able to survive state and HUD audits as well, not fun.
Thanks for your e-mail, by the way. I hope you have received my response.
Maryellen