More on interest rates, the economy, and why to buy

Here’s a couple of articles you might find interesting. For more info please contact my colleague Tom. I think you’ll find that now’s a great time to buy.

From Active Rain:

“The bigger problem that continues to persist is the expectancy of rates to drop. Last week after the meeting that is all you heard about. ‘Bernanke was a genius.’ ‘This will make the banks have to lend.’ The banks do not give two hoots. They are calling their own shots and probably laughing as they got what they wanted and no one regulated them. Now they still can not drop rates because they are under staffed and can not handle the volume. The big banks tell us to kiss their behinds because their books are more important than saving our economy. We should have let some more of the big banks tumble. This would have at least left some fear in the banking system that no bank is to big. So we are left with tons of people trying to refinance to save money and all they hear on a continual basis is that rates should be getting lower and we are left to tell them, no because the banks are not staffed well enough to handle the volume.”

From Kiplinger Reports (subscription required):

“To coax foreigners to keep lending…rates several percentage points higher. No escape from inflation, either. All that cash the Federal Reserve is pumping into the ailing economy now will become excess as consumer spending recovers and the slack in the economy is absorbed…In any case, Uncle Sam will have to borrow much more to foot the tab. And long-term Treasury rates will climb to attract the investors needed.”

Also, if you haven’t seen it it’s worth reading our recent post about an article in the Wall Street Journal.

A few other bits of wisdom from Tom. I couldn’t be happier to work with him.

Remember that FHA loans are now available up to $729,750 with a down payment of only 3.5% (the lowest downpayment available in the market). I am firmly convinced that 3 years from now we will look back and “What a Great Opportunity 2009 was. Interest rates were low and property values were very affordable.

These quoted rates are for Full Doc Purchase transactions with either no prepay penalties or a 1 year penalty and good credit. Rate ranges are shown when LTV and/or credit scores and/or loan size affects the rates offered; I hope this makes sense bacause rates at 900K are different form 700K and also from 600K:

o 30 year Jumbo fixed 6.5 to 6.875% at 1. point

o 10 year (then ARM) Jumbo- 6.0 to 6.25% at 1.0 Point

o 5 year (then ARM) Interest Only Jumbo-5.75 to 6.0% at no points

o 30 year Conforming-Jumbo fixed 5.25% at 1 point (Up to $625,500)

o 30 year Conforming fixed 4.875% at 1 point (Up to $417,000)