Recent Real Estate Happenings

The Feds have taken over IndyMac, one of the largest providers of mortgage loans. IndyMac provided loans to the in-between borrower. A borrower who was not considered prime but was not a sub-prime borrower either.

 

For you, the consumer, this means that if you are not a prime borrower, finding a loan product to match your financial situation will be a little more difficult. The mortgage credit crunch will be a little tighter. There are still loan products available and still financial institutions that will step into the gap to provide these types of loans but they will be fewer and farther between.

 

When considering a home purchase, pre-approval is more important than ever to both the buyer and the seller. Do not make the assumption that you cannot qualify for a home loan. Seek the advice of a mortgage broker. A mortgage broker, normally, has access to more loan products than bank lenders.

 

The government is considering backing Fannie Mae and Freddie Mac if funds are needed. Fannie Mae and Freddie Mac hold almost half of America’s mortgages. Actually, these institutions are stable but Wall Street and economists are very nervous and want the extra reassurance. A negative perception of these giants would have a very negative affect on Wall Street, the economy and consumer confidence.

 

Interest rates have declined slightly in the past few weeks due to investors moving their investment funds to the bond market. Interest rates may continue on this downward trend or may spike sharply in the coming weeks. This week there will be three key factors that will influence the future of interest rates: retail sales and consumer inflation data reports as well as Ben Bernanke’s report to Congress.

 

Interest rates will remain volatile until there is a clear picture regarding the direction of America’s economy. Presently, not even the experts are in agreement. Half are saying that we will still see a recession and the other half say the economy will go into an inflationary period. Until the economy stabilizes and a clearer economic picture is seen, the interest rate will be unpredictable. Changes in the interest rate will most likely be quick and sharp.

 

The good news on the economic forefront is that fewer Americans applied for unemployment benefits and consumer confidence was up according to reports last week.

 

You can wait and see but I believe the wisest choice, at this juncture in time, is to lock in your rate rather than gamble. Interest rates are still lower than last year and homes are more affordable. If you are considering a home purchase, it is an excellent time to buy.