Good Morning,
You will see that interest rates are holding steady and may be poised to dip lower if the current trends continue, although I don’t see them lowering by much. A lot of what is driving the mortgage backed security and bond market right now is the uncertainty of a solution for the Fiscal Cliff. If and when a solution is reached, we could easily see investors pull their money out of the safer investments of these two and move them back into other vessels, which would drive mortgage interest rates up.
One important piece of information for homeowners looking to sell or are near foreclosure in regards to the fiscal cliff is the potential expiration of the Mortgage Forgiveness Debt Relief Act of 2007. Essentially, this was enacted to limit the financial damage to people who sell their home via a short sale or are foreclosed on by keeping the IRS from taxing the homeowner on the debt savings. Let’s say a homeowner sells their home for $200,000 when they owe $300,000. The IRS would once again be able to tax the homeowner on the $100,000 difference. If the homeowner fell into the 30% tax bracket, they could be responsible for an additional $30,000 in taxes in this instance. OUCH! I have a hard time believing that they will allow this to expire without putting some other act or break in place but it is something to be aware of.
Have a great week!
Matt
Rates: 30 year fixed at 3.25% (APR 3.385) and the 15 year at 2.75% (APR 2.992), FHA: 3.25% (APR 4.059): As always rates change with individual credit scenarios and programs, APRs are estimated based off of a $250,000 purchase price with 20% down and a 740 credit score, if you want an exact quote, call. These are not quotes, merely a baseline measure to gauge how rates change from week to week.
Matt Royer
Mortgage Consultant, CMC | Homes Mortgage
NMLS# 366970
612-232-7646 c
651-770-0637 o
651-294-1001 f
www.MattRoyer.com
mroyer@homesmortgage.net
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