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Muthu Krishn…, Other/Just Looking in 94536

What is the current morgage rate for 30 yr fixed? I heard that it may come down to around 4.5%. Is that true?

Asked by Muthu Krishnan, 94536 Fri Dec 12, 2008

What is the current morgage rate for 30 yr fixed? I heard that it may come down to around 4.5%. Is that true?

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Optimistically, the Federal Reserve would like to buy mortgage-backed securities from Fannie Mae, Freddie Mac and Ginny Mae, providing liquidity and confidence in an attempt to strenthen bonds which in turns drops rates. Their "ideal" effect would be to drop rates to 4.5%, but this is specific to one product. That is a purchase only - with a 700+ credit score on a loan under $417k with 10% down or more. A refinance, lower down payment or lower credit score would increase that rate. That said, when one goes down, typically all go down, so even if it isn't 4.5%, most other rates are improving. I recently locked a client at 4.875% and consider that a very good rate. I would never advocate "waiting" for something that may or may not occur and instead focus on the great deals that are to be had in the real estate market - and the rates we have currently.
2 votes Thank Flag Link Fri Dec 12, 2008
Save for a down payment. If you don't have a down payment rates don't matter much. Wait another year, save another 20% on the price--and rates may be lower too. Good Luck
1 vote Thank Flag Link Fri Dec 12, 2008
Muthu, I think you are referring to a the rumored Treasury Department proposal that would cut mortgage rates for new loans for homes through Fannie Mae and Freddie Mac with rates as low as 4.5%. Like many plans for solving the housing/credit crisis, they first get politically scrutinized by "leaking" them to the media anonymously. This particular plan has not really gained any "traction" as viable - for now, who knows what the future may bring...

“Financial experts”, newscasters, and business reporters routinely bring up the 10 Year Treasury and Fed Funds Rate as a barometer for mortgage rate direction; however, the 10Y and Fed Funds Rate (the FFR does effect 2nd loans tied to Prime Rate) have nothing to do with the determination of first mortgage rates.
This chart shows that the 10Y has a poor correlation to 30Y conforming rates:
http://docs.Steven-Anthony.com/10Yv30Y.pdf

The faint correlation you see stems from the fact that Treasury Bonds are guaranteed by the US government. Conforming loans typically pay a slightly higher return than Treasuries, but are not guaranteed.

The ONLY accurate barometer for mortgage rate trending is Mortgage Backed Securities a.k.a. Mortgage Bonds - period. Make sure you are not working with someone who has his or her eye on the wrong information.
Please see: http://docs.Steven-Anthony.com/SAR-HowMortgageRatesAreDeterm…

There is ONLY ONE WAY to accurately know what a 30Y rate would be for YOUR purchase and that would be obtaining a Pre-approval - not a Pre-qualification. There is a big difference. If you have not been pre-approved I can do this for you, as I am both a Realtor and Mortgage Banker. Please make sure you are aware of the differences by visiting the link below.
http://www.Steven-Anthony.com/default.aspx?pp=39377

There are a number of variables that influence your obtainable rate. See pg 2 of the link below for a list of these 25 items and more useful facts about mortgage rates).
http://docs.Steven-Anthony.com/RateShopping-DoItRight.pdf

Best Regards,

Steven A. Ornellas, GRI, ABR, e-PRO, CMPS, RE Masters, MBA
REALTOR® / Mortgage Banker-Broker / Certified Mortgage Planning Specialist
Steven Anthony Real Estate & Financial Services
Expect Excellence. Get What You Expect.â„¢
Cell: 510.461.6011
http://www.Steven-Anthony.com SteveO@Steven-Anthony.com
1 vote Thank Flag Link Fri Dec 12, 2008
No one can say for sure. I would say as rates go down, home prices will go up. The easier to buy the faster the homes will sell.
1 vote Thank Flag Link Fri Dec 12, 2008
Muthu,

We are hearing the same information. Unfortunately, we are all going to have to wait it out to see what this means to the real estate industry and the consumer.

Our recommendation to a serious buyer is to be in touch with a mortgage specialist and request to be included on their email updates. These will keep you informed of rate changes as they are recieved.
0 votes Thank Flag Link Fri Dec 12, 2008
Rates change almost daily. If you are looking to buy or refiance, talk to a loan office or bank and take the needed steps (paperwork) so that when the rates are low, you are ready to refiance.

If you are looking to buy, work on finding the right home and less on locking in a loan which you may not even have yet. Get with an agent that can help you with this porcess and you'll be ready to take ACTION faster!

Tony
TAofSF@yahoo.com
925/325-9546
0 votes Thank Flag Link Fri Dec 12, 2008
Hi Muthu,

currently a conforming 30 yr. fixed is 5.5 to 5.58 and a 30 fixed jumbo is 6 to 6.8
but like the other answers I say look for it to go down. Good advice is to watch the 10 year Treasury bonds.

Dawn Rivera
Realty World Viking Realty
2698 Mowry Ave
Fremont, Ca, 94538
510 909-0373
0 votes Thank Flag Link Fri Dec 12, 2008
Hi Muthu,

Currently the rate for a 30-year fixed is 5%. Interest rates have been coming down lately. There is talk of lowering interest rates to 4.5% to further stimulate home buying.

Best wishes....................................Bonnie
0 votes Thank Flag Link Fri Dec 12, 2008
There is lot of options with Treasury to resolve the housing crisis and reducing the rate to 4.5% is one of them. Nothing is for granted unless implemented. However, if it gets implemented, the dynamics would be completely different.
0 votes Thank Flag Link Fri Dec 12, 2008
The 30 year fixed actually moved up a little over last week to about 5.6% currently, but I think that we will see a move to 4.5% in the next month or so.
To get a feeling for where the rate will be trending, keep your eyes on 10 year Treasury Bonds.
0 votes Thank Flag Link Fri Dec 12, 2008
You aint seen nothing yet...
0 votes Thank Flag Link Fri Dec 12, 2008
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