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Excerpts from Julie Schmit
USA TODAY
December 19, 2008
Edited by Leroy Yoder
Mortgage rates are falling to levels unseen since the 1960s, (WHAT COULD YOU BE WAITING FOR) (Leroy Yoder) driving a surge in home financing among credible borrowers. (5% down and a 680 credit score, are credible buyers)( Leroy Yoder)
The government's efforts to aid the mortgage market have driven rates to near 50-year lows, says Keith Gumbinger, vice president of financial market researcher HSH Associates. Refinancings have tripled in the past month as a result, he says.
"This is an historic opportunity," Gumbinger says. "This is the program for borrowers not in trouble." (Again 5% down and a minimum of a 680 credit score,)( Leroy Yoder)
Mortgage-finance giant Freddie Mac reports the average 30-year fixed-rate mortgage slid to 5.19% this week, the lowest since Freddie Mac started its weekly mortgage market survey in 1971. The 30-year rate was 5.47% last week and 6.14% a year ago.
This week's drop was helped by the Federal Reserve's decision Tuesday to cut a key interest rate to a record low and its pledge to give the ailing mortgage market more help if necessary.
The low rates stand to help tens of millions of homeowners cut monthly payments, which could result in more spending on goods and services and lift the economy, says Marc Savitt, president of the National Association of Mortgage Brokers.
The big questions are whether rates will go lower and how long they'll stay down. (Why would any one take a chance rates will go lower (Leroy Yoder) Please check Garden Homes rate comparison chart under the Financial section
Homeowners should act now because rates aren't likely to go much lower and they tend to rise faster than they fall, Savitt and Gumbinger say.
"We're probably somewhere near the bottom," Gumbinger says. New Home prices will certainly go up as soon as sales pick-up. Garden Homes has not had a price increase since 2005 (Leroy Yoder).
The rapid fall in rates -- set off in late November when the federal government said it would buy up to $600 billion in mortgages held by or guaranteed by Freddie Mac, Fannie Mae and others -- has spurred a crush of refinancing applications that has caught banks, mortgage brokers, appraisers and others off guard.
Low rates will also help first-time buyers, Savitt says.
The National Association of Realtors is also hopeful. It says mortgage rates, which averaged 6.3% in the third quarter, are in the 4% range in some parts of the country -- and that will bring buyers back into the market.
Contributing: Barbara Hagenbaugh (c) Copyright 2008 USA TODAY, a division of Gannett Co. Inc.
