Market Watch for the Week of March 20, 2009
Mortgage rates dropped slightly last week as the tone of the credit market improved. Retail sales were slightly better than expected which gave hope for a quicker rebound for the general economy. As has been the pattern for the past several weeks, there continues to be a tug of war in the credit markets from those who feel that we are in a pre-inflationary cycle due to all the money and capital being thrown at the markets. On the other side of the spectrum are those who feel that we are in a deflationary cycle where the economy is going to be sluggish for a long period of time. The Fed is clearly aware of this continuing economic situation and will do everything possible to reinvigorate the United States. This, in the short term, will provide stability to the mortgage market. The treasury has committed to buying at least $500 BN in mortgage debt which will help support the markets. This means lower rates as long as the markets are supported by this massive backstop. However, regardless of moves in the Government Bond Market, mortgage rates can move consistently lower for at least the next year as credit spreads are extremely high and will decrease once the economy starts to show any form of resiliency. Thus the credit markets can and will improve even in the face of higher interest rates.
Higher Loan Limits are on the Way
- FHA Financing up to $729,750 with as little as 3% down is now available in the market
- Conventional financing up to $729,750 has been approved for the credit agencies but the final pricing and guidelines are still probably two weeks away (Stay tuned for up to the minute updates once these guidelines are announced)
What is my best recommendation to you in these turbulent financial time? Whether you are refinancing or purchasing, SHOP FOR A BROKER, NOT A MORTGAGE, and ask for references from realtors as well as friends. Your focus should shift from shopping the price of the mortgage to shopping for the best broker. The broker will shop the market for you. Brokers shop lenders far better than you can, among other reasons, because they are in constant contact with many lenders, and know the niches where your situation fits.
If you need help with refinance or a private consultation, call us at TheBremnerGroup. 310-571-1364
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