Myth #1: The Fed Cut Rates, Mortgage Rates Must Have Followed
The media is doing a better job explaining what is affected by a Fed cut to the discount rate. In spite of that, I still receive a few phone calls asking me if long term rates are down a quarter or half percent due to the Fed move.
What's harder for me to explain, is why with all this government intervention, mortgage rates are much higher than before the government took over Fannie and Freddie? Maybe I have trouble explaining it because I can't understand it myself! Wasn't that the premise, lower rates more liquidity in the mortgage market? Maybe I missed something.
Myth #2: There's No Liquidity, So You Can't Get A Mortgage
The media needs some help on this topic. Many consumers are led to believe that banks are not lending right now. We have not seen this in the mortgage area. Yes, guidelines are tougher than before. Yes, there are more and more add-on's to the rate. And yes, private mortgage insurance companies are really squeezing lenders with lower loan to values and higher rates. But the fact of the matter is, mortgage money is available. Top tier borrowers can still get a nice market rate conventional mortgage. If your not a top tier borrower? There's always an FHA mortgage.
FHA has tightened some of their guidelines as well, but is still an obtainable source for millions of potential home buyers. Requiring only a 3.5% down payment and lower credit scores, show there is a lot of liquidity in today's market.
Myth #3: The Cubs Are Cursed!
Can't argue with this one! This is one myth I can't bust!
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