I hate it when the media puts out headlines like, "Treasury mulls plan to lower mortgage rates to 4.5%." What exactly did they think homebuyers were going to do when they read those headlines?
Hey Treasury...here's a clue. When you tell people you're contemplating lowering interest rates a full percent or more, they stop looking at houses and wait for the new bounty.
Several agents I've spoken to in the last couple of days are telling me that their buyers are stopping for the time being and are just going to sit on the fence until more information comes out. With rates around 5.5% right now that's great, but a drop to 4.5% would be fantastic...for those that would qualify.
If the Treasury goes through with their plan it wouldn't help homeowners who are currently in trouble with their mortgages. This plan is designed only to bring new buyers into the marketplace. Refinancing wouldn't apply either.
Another problem is that there are no published guidelines as to who might qualify for the new rate of 4.5%, or how long the rate would be around. I can just see all the people with low or marginal credit calling agents and lenders wanting to take advantage of a 4.5% interest rate. All people hear are that rates are dropping, and they want to wait to take advantage. It's human nature. If it does happen at all, there are going to be a lot of disappointed people who don't qualify for the new rates.
Hopefully, the Treasury will make their decision soon and publicize it so that homebuyers can get on with their lives.
Richard Iarossi, REALTOR®
Long and Foster® Real Estate, Inc.
Crofton, MD 21114
410-451-6255 Office
443-995-9595 Cell
Web: http://www.RichSellsHomes.com
eMail: Rich@RichSellsHomes.com
Annapolis MD Real Estate Specialist
Bowie MD Real Estate Specialist
Crofton MD Real Estate Specialist
©2008 - RichSellsHomes, All Rights Reserved
©iStockPhoto - Licensed for Use
