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mortgage loans cary ncSo the Fed announced that they are thinkin' about maybe lowerin' their rate at the end of the month. That's nice.

Here's My Concern With It...  They are lowering rates because the housing market is still tanking in many areas of the country (not mine thank goodness!) and that means fewer taxes collected... it's a BIG DEAL, don't get me wrong.

But just because the Fed lowers by .75%... Do not get sucked into believing that mortgage interest rates will go below 5.5%! How soon we forget! FANNIE AND FREDDIE are starting to add their "special fees" to borrowers with less than 680 credit score!  Once priced into the loan - rates for the MAJORITY OF BORROWERS will be 1% of interest OR MORE higher than the going rate!

ADD TO THAT the fact that FICO is changing it's model!  My personal opinion is that the scores are not going to go HIGHER with the new system...

So effectively we NEED more than the little "sprinkle" the FED is likely to give us for rates to REALLY go much lower!!!  We will REALLY need Fed Funds rates at 2 o 2.5% in order to TRULY help the economy!

 

8 Comments on Why I think Rates Will Go UP!

JAN
11
2008

I don't know I think the biggest thing we need right now is for the news media to quit yelling "THE SKY IS FALLING.....THE SKY IS FALLING....." The media is keeping a lot of the public out of the market and if they would just lay off or start reporting some of the good news then maybe just maybe the market will make a faster turn.

Here is Seattle we are really starting to see things pick up but then our market is different than most right now....

Good luck to you all and I wish you health and wealth

Todd Hueffed
4:58pm • #1
2 Featured Posts
Your blog is really great, but your picture is priceless.
5:05pm • #2
367,409 Points 5 Featured Posts Outside Blog Called Shot Master
Bad news is what sells, that is why the press is always looking for bad stuff.  Keep passing out postive information to your sphere and clients.  That's the best we can do now:)
5:43pm • #3
200,641 Points 27 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Todd:  I agree!  We need the GOOD NEWS and I guess if the press keeps saying that rates are going DOWN that could be good??

Mary:  I liked that picture too!  It's how we feel - RIGHT???  A couple of basis points "ainta' gonna do it!"

Francis!  My friend - as always - you are DEAD ON!  I just figured out that I'm probably "too hip for the room" among most of the agents I work with - so I'm EMAILING THEM links to some of the POSITIVE things I've found on AR!  I'm tryin' to spread the word!  The people here need to embrace blogging, VIDEO - lots of GREAT tools that will help us all sell the area!
6:23pm • #4
2 Featured Posts
Eleanor~ great info, especially about the additional fees that can be added in.  Love the picture, that's worth more than thousand words!!
10:04pm • #5
JAN
13
2008
200,641 Points 27 Featured Posts Outside Blog Attended Rain Camp Called Shot Master
Lisa!  Thanks - It kinda went with the size of the problem vs. the size of the response!
4:01pm • #6
811,199 Points 91 Featured Posts Outside Blog Called Shot Master

I agree with your assessment.  When the priceof money goes down, so does the dollar.  Gas, and oil, and commodities move in hte opposite direction.  That translates into $3.50 a gallon of gas and higher prices on transportation, food, produce...that is inflationary.  Prices are moving down, adn eventually mortgage money will be up to combat inflation.  So cheaper home price translates into higher cost to borrow.

PS It isn't negative press, its facts we are dealing with, and they are far worse than a press that does not understand the scenarios.
7:14pm • #7
JAN
14
2008
200,641 Points 27 Featured Posts Outside Blog Attended Rain Camp Called Shot Master
Jim -  Unfortunately - Atlanta is one of the hot markets for foreclosure.  You're right - part of the problem for the Fed is inflation worries... but the other thing the media has missed is the directly impact of the Fannie and Freddie fees.  These fees will necessarily drive rates up by at least 1 percent of interest for folks who have less than a 680 credit score.  Therefore - even if the Fed (with all of the bag of tricks) lower rates - it will not be enough to offset the FEES.  This means that any rally they are trying to create for the consumer might not work unless it's a fairly large decrease!
8:15am • #8

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Eleanor Thorne 919-649-5057 Cary Mortgage Loans

Cary, NC

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Steve Thorne NC Mortgage Experts

Address: 111 Corning Road, Suite 230, Cary, NC, 27518

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