TAG | buy a house
The Federal Reserve Bank is poised to pull the money off the table that has helped sustain the ailing real estate sector, $1.25 trillion to be exact, by March 31, 2010.
The Federal Reserve is currently winding down its purchase program of Mortgage Backed Securities that has been responsible for the recent streak of the lowest mortgage interest rates on record.
If you are considering a mortgage loan and you are on the fence about when to act, now could be the right time. Rates are not likely to be this low for much longer.
New mortgage documentation that took effect January 1st is aimed at helping consumers fully understand mortgage loan terms. The new good faith estimate format allows borrowers to more easily compare home mortgage loans offered between lenders and loan programs and encourages borrowers to comparison shop for a variety of required closing services instead of accepting a lender’s suggestions.
The new Good Faith Estimate ultimately gives borrowers an estimate of their settlement charges and loan terms. The first page shows how long the information is valid for, along with a summary of the loan characteristics. The second page summarizes the origination costs and settlement charges. The third page shows which charges can increase at settlement, as well as which ones can increase by only 10%. Read more about the new Good Faith Estimate.
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Mortgage Rates Expected to Rise when FED Stops Purchase Program
Comments | Posted by admin in Uncategorized
According to a recent Bloomberg article, Mortgage bonds are poised to slump after a record rally as the Federal Reserve’s unprecedented buying of $1.25 trillion of the securities ends as soon as March, driving up interest rates on new home loans.
Rising mortgage bond yields mean loan rates are likely to end 2010 almost 0.75 percentage point higher than current levels, based on forecasts for government bonds and spreads, adding to challenges for a housing market struggling to recover from its worst slump since the 1930s.
