The Fed helps Home Buyers

The Federal Reserve has taken significant action in the last few weeks due to the credit crunch. To date, over 120 mortgage companies have closed their doors due to reduced liquidity. The result: Borrowers who want to take out non-conforming loans have fewer, more expensive options. Many media outlets have incorrectly added fuel to the fire by stating that mortgage lending has stopped altogether and that borrowers can't get a loan without a 20% down-payment. This is not true. Conforming interest rates and loan programs, those backed by Fannie Mae and Freddie Mac, have not been significantly impacted by recent events. While this is good news, the market is experiencing unprecedented volatility and changes could come at any time. Borrowers need to act swiftly and decisively in today's climate. The Fed's decision to cut the discount window rate provides stability in the financial markets and this can be good for all of us. It's important to note that the discount rate is different than the Fed Funds Rate, which directly impacts interest rates that you pay for Home Equity Lines of Credit, credit cards, and automobile loans. Most importantly, the discount window rate cut does not directly impact mortgage rates. What should you do now?Information, knowledge, and expertise are the building blocks of sound financial decision making. You need to work with a Real Estae Broker who can help you understand that there are still attractive financing opportunities in today's marketplace – but they might be a little harder to find. Call me and let's discuss how we can give you the information you need to make the best decisions.

As always, your Real Estate Consultant for Life!