OBAMA BUMP WRONG WAY
HOME LOANS, INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
January 21st, 2009
Interest rates spiked upward slightly on Inauguration Day as President Obama took the oath of office. Many of my clients had hoped the changing of the guard would push mortgage interest rates lower. Rates were hovering at or below 5% for a 30-year fixed rate loan. Today, the best rate was 5% and went on up from there, depending on other factors:
- credit score-best rates reserved for credit scores above 720
- equity/downpayment-lowest rates for buyers with 20% down or refi’s with at least 20% equity
- verifiable income-stated income loans are out there but only for the top credit scores (around 800)
The financial markets are still trying to size up the amount and number of properties and borrowers in distress. Further exacerbating the problem are gun shy appraisers who are being overly conservative on values. There are rumors that lenders are holding back on selling homes they have taken back in foreclosure because the market is already saturated with a large number of REO properties listed for sale. Banks don’t want to flood the market with these properties fearing the adverse effect that would have on property values of surrounding homes. Sounds like we are in a vicious cycle that will be difficult to break.
Lenders I’ve spoken with have said the biggest challenge facing buyers and homeowners today hoping to refinance is lack of funds for a downpayment or equity, respectively. FHA financing is an option for borrowers with limited cash reserves for purchasing a home. Refinancing without the necessary equity will result in the borrower paying a higher interest rate/fees or being turned down for a loan.
530-224-6767 or530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
