Numerous people have asked me about the possible lowering of the 30-year fixed interest rate to 4.5%.

Here is what I have learned this week:

• The mortgage industry is lobbying congress to lower the rate to 4.5%.
• This was leaked last week and the Wall Street Journal picked up the story.
• It is NOT a done deed and may never be.
• Questions: Will it be for all buyers, re-financings, first-time buyers, principal residences only? No one knows.
• Several people I know who could have locked interest rates last week at 5.25% but chose to wait, have now lost that window of opportunity as the rates have crept up again.

Two other bits of news that may be of interest:

• Debt to Equity Ratio: Effective January 15, 2009, the TOTAL debt to equity ratio will be 45%. This means that all monthly debt payments (house, car, credit cards, etc) cannot exceed 45% of monthly income. Until then, the ratio can go as high as 60%.
• The down payment on 2^nd homes will go from 10% to 15%.

Any buyer who has been pre-approved will have to be re-approved after January 15 using the changes mentioned above.

Now for my disclaimer: This is the situation as I understand it today. PLEASE check with a mortgage provider before taking any action.