Mortgage rates are off to an outstanding start for 2009. The announcement by the FED on December 16th to begin systematically buying over $500 billion in mortgage backed securities in 2009 fueled one of the best days on the bond market all year, and ultimately led to the first long term fixed rates below 5.00% with no points.
On Monday January 5th, they followed through with their promise and began buying mortgage backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. In a report issued yesterday, the FED bought $10.2 billion in mortgage backed securities between January 5th and 7th. This plan will be implemented on a near daily basis through the end of June and should help fuel low mortgage rates for the first 2 quarters of 2009.
So, is this what it will take to get buyers off the fence? That is yet to be seen. But, with property values at a 4 to 6 year low (depending on where you are), this will seperate those who are true buyers or not. If buyers are not taking advantage of low prices and rates below 5.00%, they are probably not buyers at all.
If you are considering buying at all in the near future, the next 6 months will provide the best deals in real estate that have ever existed in your lifetime. So, prepare yourself for the process.
Begin by going to www.annualcreditreport.com and get a free copy of your credit report. You are allowed 1 free copy every 12 months, and the inquiry will not be reflected on your score.
Now, review that report line by line and look for any negative items or inaccuracies. When you find one, dispute the account with the credit bureau to get it corrected. You can google “credit dispute letter” and find hundreds of free or sample dispute letters to send out.
The next item to take care of is your income. The days of stated income loans are dead, so if you can’t prove it, it doesn’t exist (at least in the eyes of a mortgage underwriter). This is most important with self employed individuals, or people that work on tips or commission. As we enter into tax season and you are already daydreaming about all of the expenses that you can write off to lower your tax bill, go ahead and daydream about how much you like being a renter. The decisions that you make with write offs on your tax return could very well price you out of home ownership (or price you out of refinancing into a rate in the 4′s).
For a free consultation on how to buy and what to do to align yourself in this financial environment, call me anytime at 850-221-8334.
Mortgage Rates as of 10:30 AM January 9, 2009:
4.625% 15 Year Fixed
4.750% 30 Year Fixed
5.000% 30 Year VA
4.875% 30 Year FHA
Steve Russell
Mortgage Banker
Primary Residential Mortgage
850-497-6325 Office
850-221-8334 Cell
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That is great news. The mortgage guy I work with alot quoted one of my clients 4.75% on a 3 year fixed rate as well.
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