Randall & Grace Hood

Wow, have you seen mortgage rates? The mortgage market reacted positively Wednesday to the news that the Federal Reserve finally quit waffling on whether or not they would purchase the direct obligations of housing-related government-sponsored enterprises (GSEs)--Fannie Mae, Freddie Mac, and the Federal Home Loan Banks--and mortgage-backed securities (MBS) backed by Fannie Mae, Freddie Mac, and Ginnie Mae. They have committed to purchases of up to $100 billion in direct obligations and $500 billion in MBS. Read the press release As soon as the announcement was made mortgage rates fell; the loan officers we work with tell us there was an immediate rush to lock in loan rates as they fell under 6 percent. One email we received yesterday had rates around 5.75% on 30 fixed rate loans. If you have been on the fence, now might be the time to rethink your position. With low rates and great purchase prices FHA loans offer opportunity for first time homebuyers who have smaller down payments to get into their first home with a fixed rate 30 year loan and affordable monthly payments. If you are someone who has a 20% down payment you are in a great position to purchase a home as well; there are plenty of good loan products available for borrowers who can document income and employment and have low or no debt. As a parting thought, you might want to talk to your tax professional about the tax benefits of homeownership and consider making your home purchase before the end of the year to take advantage of that. Have a Happy Thanksgiving everyone.