Mortgage Market Update:
The Federal Reserve met in late April and reduced the fed funds rate, the rate at which banks lend money to each other, by a quarter-point. The
fed funds rate now stands at 2 percent, down from over 5 percent in September 2007. Wall Street analysts believe this may be the last rate decrease in store as the Fed seeks to
keep inflation in check.
Fixed-rate mortgages remain stable and hover in the high 5 percent range, up slightly from one month ago.
The National Association of Realtors (NAR) reported a March slowdown in Existing Housing Market, which was down 2.0 percent from February. As it
stands, the NAR is anticipating an annual sales volume of 4.93 million homes for 2008.
Finance Q and A:
Q: Is it better to obtain a no fee loan, or one with points and a lower interest rate?
A: Each loan has its benefits. The no fee loan is a practical option for many buyers today, but comes
with a higher interest rate and higher monthly payment. Buyers who choose a no fee loan often do so if they think they will be moving again, or if they need the money for
something else.
Buyers who pay points up front and reduce their mortgage rate will benefit from a smaller payment. This is a practical approach for buyers who
plan on staying in their residence long enough to recover their upfront cost.
Each situation is unique. To find out which option is best for you, contact your mortgage professional today!
Tip of the Month:
With the number of foreclosure investment opportunities on the rise, would-be investors are wise to consult with their mortgage professional
first about possible financing options. Depending on credit, some investors can still arrange conventional financing, while others may want to explore lines of credit or borrowing
against existing equity. Find out what options are available by calling your mortgage professional today.