Should I lock in now, or should I wait?
Hard question to answer, as the maret fluctuates every day. Rates are at an all time historic level right now. You will benefit just by being in the market today!
1. Wall Street has had zero money to lend for over a year, as investors & countries have zero appetite or tolerance to invest money into securitized mortgage notes that continues to have high default rates or declining value
2. It was the US government that was printing new US dollars and giving it to Fannie Mae, Freddie Mac and FHA so the market has money to lend
3. Banks are ONLY able to lend to you if they can sell your loan to Fannie Mae, Freddie Mac and FHA and then replenish their up front cash
4. Banks that have taken TARP funds signifies they previously had no liquid funds to lend, just toxic mortgage debt on their books
5. The US Government had taken over bankrupted Fannie and Freddie’s $5.0 Trillion failed institutions and had printed additional $1.2 Trillion to keep today’s mortgage rates low….
6. Divide $1.2 Trillion by 350 Million US citizen, this means it will cost = $3,400 for each one in your family this year today in taxes to pay off this expense…. what about the expense to institutionalize Freddie, Fannie and FHA, what about the money spent to bail out Wall Street, what about the $8,000 tax credit, what about the cash for clunkers, etc. Do you want to pay more taxes every year for all the government bailout? Do you still want a lower mortgage rate at your own expense?
7. Did you know that the US Government can not spend a penny unless they Tax you to get the money, borrow it and pay interest or print it…. and printing dollars deflates the value of US dollars and creates inflation (Economics 101)
8. US Citizens and foreign countries will eventually revolt and tell the US Government to stop printing money and to stop depreciating the Dollars to avoid taxes and inflation.
9. If you can get a 30 yr interest rate between 5.0% – 5.5%, lock it in, low interest rates will not last forever
If you can get a 15 yr interest rate between 4.5% – 5.0%, lock it in, cheap interest rates like this when there’s no money in the market will not last forever
10. Foreign countries used to love to purchase US bonds and mortgage backed securities, did you know that this week, instead of buying 27 tons like last month, India bought 200 tons of the world’s gold reserves in anticipation of major world volatility this month … China has been on the same track and will not be out done by India; why don’t they want to purchase US Bonds, aren’t US Bonds better than Gold?
… at the same time US and England continue to print money everyday only to prop up their failed banks with tax payer’s future dollars and have been very slow with any new job creation to stimulate REAL, long lasting growth
What if the Federal Reserves stops buying mortgage back securities today … who will buy our mortgage note to drive interest rates lower … no one
If you are looking for a lower mortgage payment, I would lock down an interest rates ASAP and take the bird in the hand.
When the People and foreign nations say to Congress and Feds to stop printing money or we don’t want to buy US Bonds, or OPEC Oil Cartel wants to create a new currency of trade and don’t want to peg exchange rates to US Dollars, interest rate will continue to go up.
For Counseling on any area of Real Estate-contact your neighborhood specialist-Wend-Mae Davis, CRS, GRI, Broker associate and real estate counselor for Connect Realty. Toll Free 866-333-6333, or check out her personal website at: HTTP://www.wendimae.com and you can also email her at email@example.com