Possible mortgage rate of 4.5% for new purchase only?

[zhuzhu]

I heard on NPR about the possibility of the government offering 4.5% mortgage interest rate (historical low) to new mortgage loans sometimes next year in the hope to boost the economy. However this "deal" will only be offered to new loans, not for people who want to refinance their existing homes.

While it may help the foreclosure crisis to pass a bit faster, I can''t help but wonder if this is really fair as a policy. Those who are at risk of losing homes are the ones who need help on lowering their mortgage interest rate the most, why is this policy aiming to help new buyers only? I understand that it may help those foreclosed homes to be sold faster, but is that really going bring back up the values of the homes if foreclosures continue to spread?

I can not make my mind up yet as to if I agree with this policy direction, and would be interested in hearing what you all think.

 

[Dancing Fire]

Date: 12/5/2008 8:56:04 PM
Author:zhuzhu
I heard on NPR about the possibility of the government offering 4.5% mortgage interest rate (historical low) to new mortgage loans sometimes next year in the hope to boost the economy. However this ''deal'' will only be offered to new loans, not for people who want to refinance their existing homes.

While it may help the foreclosure crisis to pass a bit faster, I can''t help but wonder if this is really fair as a policy. Those who are at risk of losing homes are the ones who need help on lowering their mortgage interest rate the most, why is this policy aiming to help new buyers only? I understand that it may help those foreclosed homes to be sold faster, but is that really going bring back up the values of the homes if foreclosures continue to spread?

I can not make my mind up yet as to if I agree with this policy direction, and would be interested in hearing what you all think.

banks should offer them a 50 yr loan.

maybe b/c they''re thee only ones that haven''t screw up their credits yet.

 

[MoonWater]

Great! Now I just need to find a house I like.

 

[Lauren8211]

I heard that on NPR also, and I think part of the reason was to help stabilize house values. I think it was supposed to have the effect of helping those who are upside down in their mortgages by sustaining or raising their property values. If you get more people buying, basic supply and demand, prices will rise.

That may be a very basic interpretation, but that was what I gathered from the NPR segment.

Any econ gurus care to weigh in?

 

[movie zombie]

i had read it would also be available for refi but i''m not sure if one has to be behind in their loan or not to qualify. also, jumbo loans would run into problems for a refi. and let''s not forget one''s house will need to appraise high enough to have equity in it in the first place. given that homes have taken a dive that could be a problem....however, appraisers have always been willing to accomodate but the problem for them will be that neighborhood equivalent sales will show a reduced value.

movie zombie

 

[iheartscience]

Date: 12/6/2008 8:20:45 AM
Author: MoonWater
Great! Now I just need to find a house I like.

Ditto! I''m keeping my fingers crossed this happens. I have my eye on a house that I''ve looked at a couple of times but I have to wait for my lease to be closer to finished.

 

[panda08]

Even if the gov''t offered a mortgage at 0%, it still wouldn''t do us any good. We have a downpayment, steady jobs, and great credit but we can''t afford anything. I''ve been watching our local housing market like a hawk and while it has dipped slightly, a decent 3/2, 1500 sq. ft. house is still around $700K to $1M. Until prices drop another couple hundred grand, we''ll have to continue to rent

I have mixed feelings about the current economic situation. It''s a bitter pill to swallow when it seems like our financial prudence has not paid off. We''ve watched our retirement accounts go down over 50%. Affordable housing is still unattainable. Wall street got bailed out and it looks like so will the Big Three and homeowners. Housing prices in our area more than tripled during the bubble and we''ll never be able to buy a place if the gov''t props up what was an artificial, unsustainable market. I don''t want to see our country go down the economic tank but I can''t help but feel like the responsible ones are left holding the bag and paying dearly for other people''s mistakes.

 

[LAJennifer]

Date: 12/8/2008 12:49:15 PM
Author: panda08
Even if the gov''t offered a mortgage at 0%, it still wouldn''t do us any good. We have a downpayment, steady jobs, and great credit but we can''t afford anything. I''ve been watching our local housing market like a hawk and while it has dipped slightly, a decent 3/2, 1500 sq. ft. house is still around $700K to $1M. Until prices drop another couple hundred grand, we''ll have to continue to rent

I have mixed feelings about the current economic situation. It''s a bitter pill to swallow when it seems like our financial prudence has not paid off. We''ve watched our retirement accounts go down over 50%. Affordable housing is still unattainable. Wall street got bailed out and it looks like so will the Big Three and homeowners. Housing prices in our area more than tripled during the bubble and we''ll never be able to buy a place if the gov''t props up what was an artificial, unsustainable market. I don''t want to see our country go down the economic tank but I can''t help but feel like the responsible ones are left holding the bag and paying dearly for other people''s mistakes.

I feel the same, panda.

 

[tradergirl]

Panda and Jennifer:

You all are right of course. Here''s a site that will possibly make you feel better. It is NOT a good time to buy right now.

www.patrick.net

 

[movie zombie]

this is right on. if i didn''t already own, i''d wait untiil the end of 2009 to start looking. only then will we have a glimpse of an idea of where this economy is going to land....and i would want to stay liquidy fluid for the ride.

movie zombie