Video Mortgage and Financial Market Update for Jan 6th

Hello Friends! What a day so far for mortgage backed securities! The Feds are buying up mortgages like a kid buying candy with his new allowance at the Dollar Tree. The Feds announced a few weeks ago that they plan on buying $500 billion in mortgage bonds over the next 6 months and the buying started yesterday at a fast pace. If you figure there are about 120 trading days between now and June 30th, that is a pace of $4 billion a day! On the days that the stocks are rallying most likely the Feds will hold on purchasing until MBS improve in pricing. This could mean that the Feds take a few days off of purchasing only to flood the market on a positive day purchasing over $10 billion in a day in some cases. This is nothing but great news for mortgage rates and liquidity in the market to make mortgages much more affordable to stimulate housing and the economy. Just to give you an idea, I sent out an analysis to a client last night comparing the rate we looked at back in September at 6.25% to the current rate at 4.75% and on a $300,000 loan, it was a monthly savings of $274 a month! Overtime, those numbers are staggering. So if you are waiting for home prices to decline even more, the window of opportunity for these rates may be gone in a few months, negating the possible lower value you are waiting for if your borrowing rate has increased. As they say, if you are waiting for the market to hit bottom, you won't know until it is coming back up. Be Blessed!